The Spaniard took time to settle, but now has the team in a great position and playing quality football.
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Club owner Bill Foley told Daily Echo: Andoni has made a huge impact since arriving at the club and we are thrilled to agree to this extension.
We have achieved a club-record points tally in the Premier League thanks to a series of excellent performances and results from the team.
The players have clearly bought into his footballing philosophy and our supporters have really taken to him.
We look forward to continuing to work with him."