The Daily Mail reports that Pearson, who is the club's third manager this season, is committing to stay beyond this season.
Pearson's initial deal was until the end of May when he was appointed in December.
The Hornets have won five games since he arrived, including being the first side to defeat Liverpool in the Premier League this term.
They are 17th in the table and it is unclear how relegation will work or whether the league will resume due to COVID-19.
But Pearson is committed to Watford for the foreseeable future.