Löw, who succeeded Jürgen Klinsmann after the 2006 World Cup in Germany, led his team to the finals of Euro 2008 where they lost to Spain. Germany has also qualified top of their group for the finals next year's World Cup in South Africa.
"We agree that we want to continue with the national team," said DFB president Theo Zwanziger. "We had a meeting on Tuesday, and from a handshake agreed to extend the contract before the 2012 European Championship. I'm glad we got treated to term."
Loew, 49, ran for 45 international with the team winning 31, drawing eight and losing six. Zwanziger said the new agreement will be signed in January.
The team manager Oliver Bierhoff, assistant Hans-Dieter Elick, goalkeeper coach Andreas Koepke and chief scout Urs Siegenthaler also remain.
"It 'was important for me is a discussion on the DFB president," said Small. "It 'important to continue working up to Euro 2012. The contract is signed, a number of points for discussion and clarification, which are important for the work of my team," he said, the site of the Alliance.
Before taking over after Germany, Loew was Klinsmann's assistant and was also the coach of VfB Stuttgart, as well as teams from Turkey and Austria.
Germany has been developed in a group with Serbia, Ghana and Australia in the 2010 World Cup.
