Queiroz stated his intention to step down as coach at the end of the World Cup in Brazil and he was linked with a move to Leeds United, but the Portuguese boss has decided to continue in his role.
While the contract is through to the 2018 World Cup in Russia, Queiroz will be assessed on Iran's performances at AFC Asian Cup in January before the Iran Football Federation (IFF) decide whether or not to stick with the 61-year-old.
"This contract is in 3 stages, first the Asian Cup," said IFF president Ali Kafashian.
"We shall analyse the results before deciding to continue with Queiroz or not.
"Second, the qualification to the FIFA World Cup 2018 and then the final part is the participation in the World Cup finals."
After taking the reins in 2011, Queiroz successfully guided Iran to the World Cup finals.
At the showpiece event, Iran finished bottom of Group F with one point behind eventual finalists Argentina, Nigeria and Bosnia-Herzegovina.
