The Italian signed the new-deal following West Ham's defeat to Chelsea and his assistant Steve Clarke should sign his new deal very soon.
Speaking to the official site Zola said, "I am delighted to have signed the contract,"
"I'm very pleased and grateful for the club for looking after me. We have a project that we are taking forward with the coaching staff and with Gianluca Nani and Scott Duxbury.
"We are very much working together and we believe very much in the project we are working on. We are going to try everything we can to make it happen."
Duxbury also admitted that he sees a bright future for the Hammers, "We hope we can achieve success this season but we are very much looking at the long-term with Gianfranco.
"With Steve Clarke soon to sign, we know we have the foundation for great success. It is a very bright future for West Ham United.
"Everything Gianfranco said to me when I first met him in