The contract extension for Phillips, who just completed his third season with the team, came less than two weeks after he led Dallas to its first playoff win since the 1996 season with a 34-14 victory over the Philadelphia Eagles.
"I'm excited about being the coach here. It doesn't matter if it's one year or 10 years," Phillips said at a news conference. "With this team right now I feel very comfortable and I think we can go further and I think we will go further."
The Cowboys were eliminated from the playoffs last week by the Minnesota Vikings in a 34-3 loss.
"I'm encouraged by the progress that we made this year, but in no way are we satisfied," Cowboys owner Jerry Jones said. "This contract represents that. Two years in the NFL is an eternity, but it has to be urgent."
(Writing by Frank Pingue in Toronto; Editing by Alison Wildey)