The 64-year-old Scotsman was initially appointed only until after the June 7-July 7 tournament in France but has been rewarded with an extended deal after restoring the culture of the team.
The squad was in turmoil with more than 10 players in open revolt against coach Andreas Heraf last year but matters have improved considerably since the Austrian resigned and Sermanni came on board.
The former Australia and United States women's coach enticed several senior players out of retirement and the squad headed to France with high hopes they could reach the knockout stage for the first time.
"The past eight months with this team have been both rewarding and enjoyable," Sermanni said in a news release on Saturday.
"I've been especially impressed with the focus and desire of the group to continually strive for improvement. Our immediate focus is on the women's World Cup here in France where we are looking to make history by getting out of our group.
"But it is great to know we have more time together as a team and over the next 12 months we can continue to build towards the Tokyo Olympics."
The Football Ferns qualified for next year's Olympics after winning the Oceania title in 2018. Their best performance at the Olympics was in 2012 in London where they made the quarter-finals.
A victory over England 1-0 in a pre-tournament friendly last week has given them renewed belief that they can get out of Group E in France.
"At previous World Cups I think our goals have been a bit unrealistic, but I think here we've been extremely realistic about where we're at and what we're capable of," defender Abby Erceg told Radio New Zealand this week.
"We have to take it stage-by-stage and the first stage is getting out of our group, which is the most important thing and that will require us taking points off the other teams."
After their match with the Dutch in Le Havre they face Canada in Grenoble on June 15. Their final group match is on June 20 against Cameroon in Montpellier.
(Reporting by Greg Stutchbury in Wellington; Editing by Nick Mulvenney)
