The Zimbabwean started in the role after the country's World Cup win in April 2011 and his initial two-year deal is due to expire next month.
While results have been modest so far under the Ashes-winning former England boss, it seems he has been given the chance to continue his evolution of a side who have lost key players such as Rahul Dravid and VVS Laxman to retirement recently.
Other established stars such as Gautam Gambhir and Virender Sehwag have also been moved on as Fletcher looks to bring through a new generation of Indian stars.
Cricinfo quoted N Srinivasan, president of the Board of Control for Cricket in India, saying: "The board has decided to extend his contract but we have to discuss the terms.
"I can't tell you the deliberations of the board. All I can tell you is what is the decision. We have decided to extend it."
- Sports & Recreation
- Rahul Dravid
- Gautam Gambhir
- Virender Sehwag