The Welshman’s previous contract expired at the end of the upcoming season but he has agreed to another year following talks with chairman John Williams.
Former Stoke and Crystal Palace boss Pulis joined the Baggies in January 2015 and has guided the club to 13th, 14th and 10th in the league table during his two and a half seasons in charge.
Last season Pulis’ work was highly commended and he made the six-man shortlist for Premier League manager of the year – eventually losing out to Chelsea’s Antonio Conte.
“I’m delighted to extend my contract because it continues the stability within the club which is essential for its progress,” said the Baggies boss.
“I’ve said all along that we are in a building phase which requires a step by step process. I think we’ve seen an improvement all across the club in recent seasons and we must continue that in what is such a tough, tough league.
“Having spoken to John at great length over the summer, we know this club has a direction it needs to follow and we are determined to do that.”
Pulis continued: “We can never underestimate just how important it is to keep our place in a league that is now the most famous and the most followed in the world.
“Neither can we underestimate how difficult that is. You only have to look at the Championship in recent years to remind yourself how many clubs have fallen through the hoop and how many sets of supporters would love to be where we are now.
“We must never take that for granted and continue to commit every ounce of our energy to keeping our club in the division every club in the country wants to be in.”
Part of Pulis’ desire to stay is to help blood some of the club’s youngsters into the first-team.
Players, such as Sam Field and Jonathan Leko, could be ready to make a step up this year and West Brom’s manager believes they have an important part to play in the future growth of the club.
“It’s also important that we maintain the development of our young players within the academy,” Pulis explained.
“I believe that there’s a tremendous talent pool in there and if that talent cannot be realised immediately within our own ranks it is vital we get them out into league football to continue their development and education.
“But I do believe in the future of these young players and that’s an important part of the development of the club – especially with the incredible rises we are seeing in prices within the transfer market.
“Managing outside the seven or eight in the Premier League is a tough job but it’s one I still relish and enjoy. It’s a great challenge but it’s important that we maintain stability to tackle it.
“As for the season ahead, we of course want to improve our Premier League challenge and do everything we can to make a strong challenge in at least one of the major cup competitions.”