He has reportedly swapped his rolling 12-month contract for a fixed-term deal in return for a sizeable pay rise, with his annual salary now rumoured to be in the region of £1.25million.
However, the move is not necessarily a sign that Sir Bobby will retire at the end of next season.
The former England boss told The Times: “I’m delighted to put the rumours to bed. I know there’s been some speculation about my position here, but I’m pleased to say that I’m going to be working at St James’ for at least another season.
“At this time next year, we’ll review the situation and it’ll depend on what the chairman wants, what I want and, obviously, how results are going.
“Who knows what will have happened by then, but if the team are doing well, as I hope we will be, and I feel as good as I do now, then why would I want to give it up?
“I had a chat with Sir Alex Ferguson a couple of years ago, when he was thinking about retirement at Manchester United, and I said the same thing to him then. Why put in all this hard work just to walk away?
“It hasn’t always been easy for us this season, but we’ve still got a lot to play for and I’m fit, well and as committed to this club as I ever have been.
“We’ve just had a great victory over Charlton and we’re all pulling in the same direction. The next step is to get back into the Champions League and then go on to win something and that’s what we’re all aiming for, from the chairman down.
“I just hope this keeps the wolves at bay.”