Tuchel was given an 18-month contract when he replaced Frank Lampard in January and the 47-year-old German has excelled in his short time at Stamford Bridge to warrant a new deal.
Chelsea were ninth on the league log when Tuchel took charge but the Blues finished the campaign in fourth place and made the FA Cup and Champions League finals; losing the former to Leicester City and winning the latter against Manchester City.
On the extension of his contract, Tuchel told the club's official website: "I cannot imagine a better occasion for a contract renewal. I am grateful for the experience and very happy to stay part of the Chelsea family.
"There is far more to come and we are looking forward to our next steps with ambition and much anticipation."
Chelsea director Marina Granovskaia added: "When Thomas joined us in January there was still so much to play for domestically and in Europe. He slotted in seamlessly and immediately became an integral part of the Chelsea family.
"Returning us to the top four in the Premier League was crucial, and we could not be happier with our success in the Champions League which crowned a remarkable season at Chelsea.
"We are obviously extremely pleased therefore to retain Thomas for a further two years, and look forward to more achievements in the coming seasons."
