"Lou Piniella has done an outstanding job with the Cubs and we couldn't be more pleased to exercise his option for the 2010 season," Hendry said in a release. "Lou exudes success, is an excellent leader and brings a humble, confident swagger to our entire organization."
Chicago was swept by Arizona in its NL Division Series appearance last season, and on Wednesday the Cubs begin their NLDS with the Los Angeles Dodgers.
Regardless of the result, Piniella became the first Cubs manager to lead the team to consecutive postseason berths since Frank Chance did it from 1906-08.
Piniella was hired in October 2006, when he signed a three-year deal with an option for a fourth. His 182-141 regular season record with the Cubs provides a better winning percentage (.563) than any other stint of his managerial career.
The 182 wins are also the most in consecutive seasons by the Cubs since 1935-36, when Chicago won a combined 187 contests.
The 65-year-old Piniella has a lifetime managing record of 1,701-1,561 and prior to the Cubs, was most recently the skipper for Tampa Bay from 2003-05. He also piloted the New York Yankees, Cincinnati Reds and Seattle Mariners, earning AL Manager of the Year awards with Seattle in 1995 and 2001 and a World Series title with Cincinnati in 1990.