Speaking to the Official Club Website of his new deal, Town boss Joe Royle said: "We are both delighted to have signed. I love the place, the Club and look forward to another two and a half years here.
"I'm not really one for contracts and certainly wasn't pushing for it but the Chairman wanted to do it which was nice."
Meanwhile Town Chairman David Sheepshanks was also delighted to tie up the deal: "It means the Club is in a stable position, the players know who will be in charge for the foreseeable future.
"Joe had done a terrific job since he came here two years ago and has over-delivered in the time he has been here and I'm delighted that he and Willie have committed themselves to the Club for another two years."