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"The season so far has shown us that it works between ourselves and Juergen Klopp," said Dortmund CEO Hans-Joachim Watzke.
"We wanted some continuity in this very important area and we had no doubts about extending the contract," he added.
Klopp joined Dortmund at the end of last season and the 41-year-old and has helped the club to take ninth place in the Bundesliga so far.
"It functions 100 percent here. We work very constructively together," said Klopp, who replaced Thomas Doll after Dortmund finished last season in a disappointing 13th place.
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Borussia Dortmund's coach Juergen Klopp reacts during his team's German Bundesliga soccer match against Bayer Leverkusen in Leverkusen August 16, 2008. Dortmund won the match 3-2 |
Before taking the helm at Dortmund, Klopp took over Mainz 05 in 2001 and after twice failing to gain promotion managed to do so in2004, but was relegated three years later.
Zorc said Dortmund, who have won the Bundesliga title six times and were crowned Champions of Europe as recently as 1997, would look to their youth set-up to help the club return to the top.
In a relevant development, Bayern Munich captain Mark van Bommel and defender Martin Demichelis have both agreed contract extensions with the German champions, the club confirmed Thursday.
The Dutch captain's current contract was due to run out at the end of the current season but the 31-year-old midfielder will now stay with Juergen Klinsmann's side until the end of the 2010 season.
Argentina international Demichelis will now remain at Bayern until 2012 after agreeing a two-year extension to his current deal.