The former Charlton boss, who led his side to an npower League Two play-off victory over Northampton on Saturday, joins assistant manager Steve Parkin and fitness coach Nick Allamby in putting pen to paper.
Parkinson joined the club in the summer of 2011 and the Bantams finished 18th in his first season before reaching the Capital One Cup final and then the third tier during a memorable 2012/13 campaign.
There had been speculation linking the 45-year-old with a move away from Valley Parade before Bradford's announcement.
- Sports & Recreation
- Steve Parkin