The brothers led the Imps to promotion back into the English Football League last season and also reached the FA Cup quarter-finals.
Lincoln currently sit sixth in League Two and need one point to seal a playoff berth with two games to play.
"We are delighted to announce that Danny and Nicky Cowley have extended their contracts at Lincoln City until 2022," the club announced via their official website.
"Their original deal was due to expire in the summer of 2021, but following discussions the managerial duo have put pen to paper for a further year.
"Negotiations have been ongoing for some time with the Imps' management duo with the main focus of the talks revolving around the potential future growth of the club as well as the plan for the off-field developments and of course the new Elite Performance Centre in which the Cowley brothers have been heavily involved."
Lincoln also won the EFL Trophy at Wembley Stadium earlier this month.