It was "unanimously agreed to further the tenure" of the 50-year-old former skipper, the Board of Control for Cricket in India (BCCI) said in a statement.
"The board acknowledges Mr. Dravid's instrumental role in moulding the Indian team and commends his exceptional professionalism," it said.
Dravid's contract had expired after the World Cup, which ended on November 19 with India's defeat to Australia.
Dravid was appointed in November 2021 for a two-year period.
His team of support staff, including batting coach Vikram Rathour and bowling coach Paras Mhambrey, have also been retained.
The BCCI did not say how long the new term would be, with India now eyeing the Twenty20 World Cup in June next year as they attempt to break their painful drought in global tournaments.
"Mr. Rahul Dravid's vision, professionalism and unyielding efforts have been important pillars in team India's success," Roger Binny, president of the BCCI, said.
India, captained by Rohit Sharma, remained unbeaten in 10 matches coming into the World Cup final in Ahmedabad.
But they lost by six wickets to an Australia side who extended their record of World Cup titles to six.
India last won a global title with the 2013 Champions Trophy and their last World Cup triumph came in 2011 at home.
Dravid, nicknamed "The Wall" or "Mr. Dependable" for his classic batting and rock-solid defence, is expected to lead the team on their tour of South Africa next month.
Before retiring as a player in 2012, Dravid scored 13,288 runs in 164 Tests, second only to the legendary Sachin Tendulkar for India and fourth overall in the world rankings.
