After weeks of speculation, the IFA made the announcement at a press conference attended by the 63-year-old, confirming he would remain in charge through the Gulf Cup in Saudi Arabia in September, as well as the Asian Cup early next year.
"I have renewed my contract for six months, and this decision is in my best interest and in the best interest of the Iraq national team, although the association offered me a four-year extension," Arnold was quoted as saying by the Iraqi News Agency.
Arnold guided Iraq to this year's World Cup in the United States, Canada and Mexico, ending a 40-year absence from the tournament. However, Iraq exited at the group stage after losing all of their Group I matches against Norway, France and Senegal.