The 67-year-old German managed Manchester United from 2021 to 2022 before taking charge of Austria later that year. His previous deal had been set to run until after the World Cup in the United States, Mexico and Canada.
Rangnick helped Austria qualify for a World Cup for the first time in 28 years.
"Rangnick will continue the successful run with the Austrian national team and remain in his role with the Austrian Football Association at least until UEFA EURO 2028," it said in a statement.
"Under Rangnick's leadership, the Austrian squad has developed exceptionally well both on the field and structurally in recent years and has established itself on the international stage."
Austria begin their World Cup campaign on Tuesday against Jordan at the San Francisco Bay Area Stadium. They are in Group J, which also includes holders Argentina and Algeria.
The 2026 World Cup will be held from June 11th to July 19th in the United States, Canada and Mexico. The tournament will feature 48 national teams and will be played in 16 modern stadiums.
Match schedule and times | Group tables | Full squads for World Cup | How to watch the World Cup