Redknapp said: "Since returning to Fratton Park I have had nothing but the utmost support from the owner Sacha Gaydamak and chief executive Peter Storrie.
"They have backed me 100% in the transfer market and I am genuinely excited about the group of players I have here with me now.
"The club as a whole is moving in the right direction with exciting news off the field with a new training ground coming next year and fabulous new state-of-the-art stadium also in the pipeline. It's a great place to be right now and I can only see that getting better."
Redknapp first took charge at Fratton Park from March 2002 until November 2004, and then again from December 2005 - a season in which the club narrowly avoided relegation.
He has been in charge for 197 games at Fratton Park, winning 87 and losing 64 and being victorious in 44 out of 124 outings in the Barclays Premier League.
Chief executive Peter Storrie added: "Harry has done a great job, first rescuing the club from the jaws of relegation and then building a team now strong enough to push for a European place.
"I know Harry has been impressed by Sacha's plans for the club not only on the pitch but also off it. Obviously it's a great coup for us to have one of the best managers in the business pledging his long-term future to the club."