Dyche took over the Lancashire club in October 2012 and guided them to promotion in his first full season in charge as Burnley finished second in the Championship behind Leicester City.
And the 42-year-old has now been rewarded for his success with a new contract, although no indication has been given as to the length of the agreement.
In an open letter on the club's official website, co-chairmen John Banaszkiewicz and Mike Garlick said: "We are very pleased to announce that we have agreed new and improved contracts with Sean Dyche and his staff and we thank them all for their hard work."
Former Watford boss Dyche will take change of his first Premier League game on August 16, when Burnley welcome Jose Mourinho's Chelsea to Turf Moor.
Dyche has yet to make any additions to his squad, but the club are adamant that they are working hard to try and bring in new recruits.
The letter read: "We know that every Clarets player will wear the shirt with pride as we go up against some of the biggest clubs in the world and are working hard to identify the most suitable transfer targets to be assets for the club in the long term.
"We are hoping that we only make headlines once deals are done and we will do everything we can to be discreet and limit the rumour-mill, which can be detrimental when seeking and signing players."
