Babbel to stay on as Stuttgart coach
Babbel, in his first full season in charge and still studying for his coaching licence, has come under increasing media scrutiny since Tuesday's 1-0 defeat by second division Greuther Fuerth in the German Cup third round.
"We have analysed the situation with the coaching staff and the board and we have decided we will stick with this team," said sports director Horst Heldt.
"Markus Babbel and his staff have given the impression they can drag the team out of the crisis. Now we need positive results as fast as possible," Heldt told the club's website.
Babbel led the afternoon training session and was greeted by cheers and applause from several hundred fans.
Stuttgart's defeat on Tuesday was their fifth in a row in all competitions.
The former Bayern Munich and Liverpool defender took over midway through last season and steered the club to third place in the Bundesliga.
This season, with leading striker Mario Gomez having joined Bayern, Stuttgart have gained eight points from 10 games and are down in 14th position in the 18-team Bundesliga.
They are also second from bottom in Champions League Group G with two points from three matches.