The new deal will keep Kurz in charge of Kaiserslautern until the summer of 2013.
“We have one of the best coaches in the league and we want to work with some continuity in this position,” club chairman Stefan Kuntz said.
“Marco Kurz brought this club back into the Bundesliga after four years and he led us to a sensational seventh place in our first year back. With him, we will also avoid relegation this year and set new goals for the future.
“Work here at Kaiserslautern is characterised by honesty and trust, and I am delighted to be able to continue with this club.
“We are certainly not at the end of our path and our aim is to establish ourselves in the Bundesliga with hard work and concentration.”