The 55-year-old has enjoyed an impressive spell with the national side since taking over in 2017.
He has guided Croatia to the 2018 World Cup final — where they lost to
France — to the last 16 of Euro 2020 and to next year’s World Cup finals.
“Zlatko (Dalic) should have unlimited credit with all of us on the basis of silver in Russia, everything he did with the team afterwards shows that he is an ideal man to lead Croatia”, the Croatian football federation (HNS) head Marijan Kustic said in a statement.
Dalic said he considered his job the “biggest privilege that a coach can have.”
“So, I had no doubts when HNS proposed to me to continue our co-operation” which was due to end next year, he added.
Dalic’s most notable previous coaching spells came outside of Europe — he was in charge of top Saudi Arabian clubs Al-Faisaly and Al-Hilal.
In 2014, the former defensive midfielder took over Al Ain in the United Arab Emirates, where he was named coach of the year twice, leading the club to the 2016 Asian Champions League final.