The Lightning have made the playoffs twice in four seasons under Yzerman's watch, reaching the Eastern Conference Final in 2011.
Tampa Bay has already qualified for this season's playoffs and is currently in third place in the Atlantic Division.
"I'm grateful for the opportunity to continue the process we started four years ago and would like to thank (owner) Jeff Vinik for entrusting me with the responsibility of leading the Tampa Bay Lightning," Yzerman said in a statement. "I'm very excited about what lies ahead for our organization and truly enjoy working with a fantastic group of people in Tampa Bay."
Yzerman, who has one year remaining on his initial contract with Tampa Bay, also served as general manger of Canada's gold-winning Olympic men's hockey teams in 2010 and 2014.
Yzerman spent 27 seasons with the Detroit Red Wings as a player, captain and front-office executive prior to joining the Lightning.
The Hall of Famer ranks sixth in NHL history with 1,755 career points. He is a four-time Stanley Cup Champion, winning three as a player in 1997, 1998 and 2002 and another as a member of Detroit's management team in 2008.
"Since the day Steve agreed to serve as our vice president and general manager, he has worked tirelessly to transform our hockey department and establish the groundwork for sustained success", Vinik said. "We are very pleased with Steve's job performance thus far, and I am fully confident Steve remains the right person to continue to lead us."
The Lightning also announced Monday that Steve Griggs has been promoted to president.
Griggs had served as the team's chief operating officer since 2010.
He also spent six years in various roles with Maple Leafs Sports and Entertainment.