"Ivan has also played a vital role in setting up our development programs all the way back to junior league football, which I know will produce a steady stream of NRL quality players for many years to come.
"Under Ivan's guidance, we are on our way to making the Panthers a major player in the NRL competition".
The Panthers finished second last in 2012 in a forgettable year in Cleary's first season in charge.
But this season the wooden spoon fancies have been the NRL's surprise packets.
After a slow start to the season, some impressive mid-year form resulted in an an upset win over premiers Melbourne and a record 62-6 win over the Warriors.
They twice put together three-game winning streaks before their performances dipped in the latter stages of the season.
But the Panthers can still qualify for the playoffs if they defeat Canterbury and Manly in the final two rounds.
Cleary said he was happy to have his future secured long-term.
"When I first arrived at Penrith I saw huge potential coming through in the junior ranks and some great talent already cemented in the NRL squad, I'm very positive about the future of the Panthers, and I'm excited to be staying on until 2016," he said.
"We have some experienced players joining the NRL squad next year, along with a handful of juniors, and I think this mix will see us continue to improve".
Cleary, who played for 186 first grade games for Manly, North Sydney, Sydney Roosters and the Warriors spent six years coaching the Warriors and took them to the 2011 grand final before joining Penrith.
- AAP
