The Portuguese hinted last week that he could bring an end to his tenure at the Spanish club following their failure to progress beyond the semi-finals in the Champions League for the third season in a row.
"I have decided to continue," ESPN quotes him as saying on Tuesday. "I want to be paid by Real Madrid right until the day that I stop, not one day further.
"I understand that the world of football, just like the modern society in general, can be a hypocritical place. Those are not my principles. I feel fine, normal, relaxed at the moment."
Mourinho's current contract at Madrid runs out in June 2016.