The 49-year-old has transformed the club from relegation battlers to Championship play-off hopefuls since taking over at the club in 2009.
McDermott told the club’s official website: “I am absolutely delighted, this is the place I want to be and the club I want to work at.
“I’ve been here close to 11 years and I feel very much part of things. I’d like to thank the chairman, the board and Nick Hammond, and I’m also fortunate to have fantastic staff and players.
“As a club we have continuity, it’s a great place to work and a great place to be. Now we look to the rest of the season, we’ve got nine games left and so much to play for.”
