Pellegrini, who joined Betis in the summer of 2020, would have seen his previous deal expire in 2023.
The 68-year-old Chilean took Betis to 6th position in his first season at the club, qualifying for the Europa League, and has seen them challenging at the top half of the table once more this term as they currently lie in 3rd position on the table.
An official statement on the club's website read: "Real Betis Balompié and Manuel Pellegrini have reached an agreement for the contract extension of the Chilean coach.
"The Green and White head coach signs a new contract until 2025.
"Manuel Pellegrini arrived to Real Betis in the summer of 2020. In his first season in charge of the squad, he qualified the team to play the UEFA Europa League after finishing in 6th position in LaLiga.
"In the current season, the team is in third position in the league and competing in Copa del Rey and the Europa League.
"The Chilean manager has become the coach with the highest percentage of victories in Real Betis Balompié history. Also, with him in the bench, the team plays an attractive, offensive and recognizable football.
"The coach's contract extension means an important step forward in Real Betis Balompié's growth project, getting behind one of the most prestigious coaches in world football. The agreement has been reached quite quickly, due to great relationship existing between the coach and the Club's administrators."
Pellegrini took Villarreal to the semi-finals of the UEFA Champions League in the 2005/2006 season, losing to Arsenal and nearly replicated that feat with Malaga in the 2012/2013 season with a quarterfinal appearance.
Pellegrini’s most successful stint in Europe however came in England with Manchester City from 2013 to 2016, winning the Premier League title in his debut season and adding two League Cups before his departure.
