Counsell has guided the Brew Crew to a 405-381 record across five years. The club has current streaks of three winning seasons and two playoff appearances.
Brewers president of baseball operations David Stearns released a statement about the new deal.
"We are pleased to extend the contract of one of the best managers in the game today," he said. "Over the last five seasons, Craig has led our team with a passion and intelligence that has resulted in some of the greatest success in the history of the franchise. I am confident in Craig's abilities to lead, teach and compete as we continue our mission of bringing a championship to Wisconsin."
Milwaukee is coming off an 89-73 campaign that earned the team a wild-card berth. It held a 3-1 lead over the Washington Nationals in the NL Wild Card Game, but the Nats scored three runs in the bottom of the eighth inning and went on to win the game and eventually the 2019 World Series.
"Leading this organization on the field continues to be a great honor and unique privilege," Counsell said after signing his new contract. "I am very proud of what we have been able to accomplish during a short period of time through our collaborative efforts, and look forward to what the future holds."
The 49-year-old Indiana native, who won two World Series during his 16-year playing career, will lead a roster that's been bolstered by a series of offseason additions. Outfielder Avisail Garcia, infielder Eric Sogard and starting pitcher Brett Anderson are among the club's new players.
Those acquisitions alongside a strong foundation that features 2018 NL MVP Christian Yelich and 2011 NL MVP Ryan Braun at least put the Brewers in the championship conversation.
They have 20-1 odds to win the 2020 World Series, which is tied for the 11th-best mark in the league, according to Caesars Sportsbook.
Meanwhile, the extension provides some job security for Counsell, who was set to enter the final year of his previous contract in 2020.