"I would like to thank all the directors and all the fans of Atletico Madrid for their support in the continuity of this project," Simeone said in the video.
"We look forward to the project continuing until 2022 with a lot of excitement, knowing that big challenges await us."
Simeone, 48, who spent two separate spells at Atletico as a player, took over as coach in December 2011 with the club hovering above the relegation zone and transformed them into one of the top sides in Europe.
Simeone has won seven trophies with Atletico, including two Europa League titles, one Copa del Rey and one La Liga title, and has taken them to two Champions League finals, losing in 2014 and 2016 to Real Madrid.
(Reporting by Richard Martin; Editing by Christian Radnedge)
