Puel, 53, originally had a three-year contract when he took the reins of the Ligue 1 club in 2012, but is assured of another season in charge.
Nice only survived relegation to Ligue 2 by two points in 2013-14, with Puel's best season at the helm coming in his first year as he steered them to fourth spot.
Nice president Jean-Pierre Rivere was quoted as saying he would extend Puel's contract amid the club's seven-game losing streak last season, and he has come through with his promise.
"Claude Puel, whose accomplishments in training have marked the course, was a natural to lead this battle plan," a translation of the club's statement read.
"The outstanding fourth place in 2012-13 and development of many young players trained in Nice and thrown into the deep [end] testified the merits of the decision [to keep Puel] more than two years.
"Fed with the same ambitions, the club and its head coach today naturally continue to build the future together."
Next up for Puel's men is a home game against Bastia on Saturday.
