The former Manchester City and Tottenham Hotspur man has been influential in bringing a number of low-profile talents to St. James' Park.
Carr assisted in recruiting the likes of Yohan Cabaye, Cheikh Tiote, Papiss Cisse and Demba Ba to the club, who exceeded expectations last season in finishing fifth.
Owner Mike Ashley has been delighted with the work of the 67-year-old, with managing director Derek Llambias echoing the sentiments.
"We are delighted to have agreed an eight-year deal with Graham, and very pleased that he has committed his long-term future to the club," he told the the Magpies' official website.
"He has been instrumental in helping us to bring some truly exceptional players to Newcastle United and he has deservedly built one of the best reputations in the business.
"Graham works tirelessly to identify talented young players from across the world and has done a magnificent job over the last two years.
"He has the complete faith and support of the owner, the board and the manager, and it is excellent news that the club will continue to benefit from his expertise for many years to come."
Carr arrived at Newcastle from Spurs in 2010 when Chris Hughton was still in charge and his new deal will keep him at the club until the age of 75.
