The deal announced Monday replaces a contract that was to expire in February 2015.
CBS said the 63-year-old Moonves' salary will remain the same and he will still be eligible for an annual bonus and stock grants.
In 2011, his pay package rose 20 per cent to $68.4 million, a sum that ranks him among the highest paid U.S. corporate executives.
At the end of his contract, Moonves can choose to be an executive adviser to CBS for another four years. He also has the option to establish a production company using the CBS brand during that time.
Sumner Redstone, the executive chairman and controlling shareholder of CBS Corp., hailed the deal as "terrific news for CBS and all of its constituencies."
CBS' stock is up about 25 per cent so far this year, thanks to an advertising rebound, higher fees from pay TV distributors and deals to place its older shows on online services such as Netflix. It closed up 26 cents at $34.03 on Monday.