Benitez had originally been reluctant to extend his time at the Magpies because he was unsure if was Ashley would hand him complete control of player recruitment.
Speaking after a meeting with Benitez, Ashley said: "I've confirmed to Rafa and Lee that they can have every last penny that the club generates through promotion, player sales and other means in order to build for next season."
Sky Sports reports that Benitez will be handed £70m in the summer transfer window, minus what it will cost to run the club.
Benitez, who was handed control of player recruitment when he stayed with the club in the Championship this year, was delighted with being handed the same responsibilities for next year.
"I'm pleased with how the meeting went and the positive approach we are all taking together to build on what we have started this season," Benitez confirmed.
"There will be challenges ahead of course, the summer will not be easy, but the hard work has been going on for some time and we can now continue positively with the development of the squad ahead of the start of the new season. I wish fans an enjoyable summer!"
Ashley and Magpies fans have had a tumultuous relationship since he purchased the club in 2007, with one of the problems being Ashley's percieved reluctance in investing in new players.