''It's a humbling experience to be around the UConn fans and the UConn family and to know that I am their basketball coach for the foreseeable future,'' Ollie said.
University president Susan Herbst said Ollie is the ''right person'' to lead the team.
The 41-year-old Ollie, who spent 13 years as an NBA journeyman before returning to his alma mater, has been linked to several NBA job openings, including with the Los Angeles Lakers and Cleveland Cavaliers.
He is 52-18 in his two seasons with the Huskies. He took over a team that was banned from the postseason in his first year due to past academic problems.
The Huskies went 8-1 this past postseason including its 6-0 run in the NCAA tournament.
The agreement runs through May 31, 2019.
Ollie's previous deal, worth about $7 million, runs through the end of the 2017-18 season. He made a little more than $1.6 million, with bonuses for the NCAA tournament run, last season.
He has made a point of preaching loyalty and family to his UConn players. From 1991-95, he was the school's point guard under Jim Calhoun. The Hall of Famer Calhoun hired Ollie as an assistant in 2010 before hand-picking him as his successor when he retired in 2012.