The Chelsea legend served as an assistant to Dean Smith during the club's successful promotion season.
Villa chief Smith said: "I am really pleased that JT has extended his current deal as he is a pleasure to work with.
"We have had a successful start to our Villa coaching careers and JT has been instrumental in joining myself, Richard O'Kelly and Neil Cutler.
"He has complimented the team that we have and I have no doubts he will go on to be a top manager in the years to come.
"Our focus now is on the coming season and to try to continue the progress we have had in the past eight months."