|Chelsea manager Roberto Di-Matteo photo:Reuters|
"We all achieved incredible success last season that made history for this great club," said the 42-year-old.
"Our aim is to continue building on that and I'm already looking forward to the squad's return for pre-season."
Former MK Dons and West Brom manager Di Matteo lost just three of his 21 matches in charge, and several of the club's senior players voiced their support for him as permanent boss following the Champions League final success over Bayern Munich and FA Cup final victory over Liverpool.
The midfielder's first season at Stamford Bridge had ended with him scoring in the first minute of the FA Cup final against Middlesbrough as Chelsea won their first major trophy for 26 years.
He also found the net in a League Cup final win over Middlesbrough in 1998 and in the 2000 FA Cup final against Aston Villa.
Di Matteo became a manager for the first time at third-tier MK Dons in July 2008 and the following summer he moved up a division to West Bromwich Albion.
He took the Midlands club into the Premier League at the first attempt before leaving in February 2011aftr a run of 13 defeat in 18 games.
"Roberto's quality was clear for all to see when he galvanised the squad last season and helped the club make history, and the owner and board are very pleased he will be continuing his good work," said Chelsea chief executive Ron Gourlay.
"We all believed he was a young coach with much to offer when we first asked him to take charge and the manner in which he worked with us, the players and all the staff, and the success that followed, made him the clear choice when it came to selecting the person to take us forward in the seasons to come.
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