The Australian's current deal was due to expire following the 2019 World Cup in Japan, but the RFU has granted him two more years on his deal with the team.
The extension, which also includes a break clause based on England's performance in the World Cup, was signed on Wednesday morning.
"Coaching England is a dream job for me, and I was delighted to be asked to stay on after Rugby World Cup 2019," Jones told Sky Sports News. "I have been completely focused on developing a team capable of being the number one rugby team in the world and winning the World Cup in 2019.
"I never take my role as England head coach for granted and did not presume I would be asked to stay on, but, once the conversations started very recently, it was not a difficult decision to make.
"These are exciting times for English Rugby, with a focused and committed squad who are full of potential and determined to win. I will continue to work as hard as I can to make England the world's best rugby team."
England's next fixture is their Six Nations opener against Italy on February 4.