Holland, who is also the team's executive vice president, is now signed through the 2017-2018 season. He has been the team's general manager for the past 17 seasons.
The Red Wings have won more games in the regular season and postseason than any other team during his tenure. Under Holland's leadership, Detroit has won four Stanley Cups, most recently in 2008.
Holland, 58, has been with the franchise for 31 years, dating back to his time as both a player and scout.
Detroit owner Mike Ilitch emphasized the value of continuity in bringing back Holland.
"We feel strongly that stability is key to the success of any organization and having this new agreement in place with Ken is important to the organization and its future.”
The Red Wings finished last season 39-28-15 before losing to the Boston Bruins in the first round of the playoffs. Detroit has made the playoffs 23 consecutive seasons.
- Paul Palladino