The 69-year-old, due to be out of contract in South Wales at the end of the current campaign, will now remain in charge of the Bluebirds until the summer of 2020.
Having transformed Cardiff from a relegation-threatened club to a team battling for automatic promotion in his 16 months at the helm, Warnock is desperate to get over the line and earn a place in the Premier League.
"Although I actually signed the document this week, the detail of what it entails was agreed back in December," Wales Online quotes him as saying. "Vincent Tan, Mehmet Dalman and Ken Choo wanted a little bit of stability. They trusted me because I said I was staying, but I guess they wanted it down in black and white, too.
"I get terrific support, Mehmet is as good a chairman as I've worked with, and that backing, and what we can achieve together, is the key. It's not about money for me at my age, it's about the opportunity for that eighth promotion in my career. We'll have a good crack over the next couple of months, but even if we don't go up this season we've got a super squad in place to have another go next time around.
"In football you never know what's around the corner, but by sticking together - directors, management, players and fans - we can look to do something. It's a challenge, but when you look at where we were 16 months ago when I first came in, to where we are today, the place is already unrecognisable. I told Vincent and Mehmet back then 'If I do my job correctly, we'll be pushing for the play-offs next season'.
"They thought that was a little bit over the top, but I know how to build up a squad. The players have not let me down, the fans have been brilliant and I have the support I need from the board. You just can't replicate jumping up and down in the dugout and sharing the fans' joy after a goal. I can't get that from working in my garden, fishing or pottering around the house, can I?"
Cardiff are currently second in the Championship table, six points adrift of leaders Wolverhampton Wanderers and four in front of third-placed Aston Villa.