Lennon, who succeeded Alan Stubbs in the summer of 2016, led Hibs to the Scottish Championship title during his first season at Easter Road, as well as the semi-finals of the Scottish Cup.
Lennon said: “I am delighted to have signed the deal. I’ve made no secret of my enjoyment of my time at Easter Road and my desire to stay on at Hibernian.
“All of the parts are in place to build a strong future. We have a strong group of players, we are seeing talented youngsters like Fraser Murray and Ryan Porteous force their way into first-team contention, and we have good, supportive people running the club.
“The infrastructure is first class, it’s a great club, and now I want to do all I can to make it a successful one.”
Leeann Dempster, Chief Executive, added: “We are delighted that Neil wants to commit to the club. He is an ambitious guy, he wants to win silverware, and he brings that mentality with him.
“We look forward to working together to bring supporters more of the success they have enjoyed over the past two seasons.”