Hodgson’s contract was set to expire in the summer, but now the former Viking boss has agreed a deal with club owner Mohamed Al Fayed.
“It wasn’t a difficult discussion,” Hodgson told the Evening Standard.
“We are basically in agreement and I’ve got to say it was very easy to come to that agreement.
“It seems that everyone is keen for me to stay and I’ve always made it perfectly clear that I’m happy to stay.
“I’ve never made any secret of the fact that I’m happy at Fulham and I’m enjoying the job here.
“It is just a matter now of putting the contract discussions that we have already had onto paper.”