Rivers, whose contract was to run through 2007-08, will have a little more job security as he tries to improve on a season in which the NBA's most decorated franchise lost a team-record 18 consecutive games and finished with the second-worst record in the league.
"Doc is a leader and I have all the confidence in the world in Doc as coach of the Celtics," Danny Ainge, the team's executive director of basketball operations, said in a statement. "With Doc as our coach we have the continuity that is crucial in the development of the franchise."
The team would not disclose financial terms or length of the extension.
Rivers is 102-144 in three seasons in Boston, going 24-58 in 2006-07 to finish in last place in the Eastern Conference, 16 games out of the playoffs. That gives the Celtics a 38.7 percent chance at landing one of the top two picks in the draft, widely expected to be Ohio State center Oden and Texas forward Durant, both freshmen All-Americans last season. Only Memphis, which has a 46.5 percent chance, has more ping pong balls in the hopper for the draft lottery May 22.
The NBA draft is June 28.
"I am more determined to move this franchise in the right direction," Rivers said, "and I believe that I can do that."
Winners of a record 16 NBA titles, but none since 1986, the Celtics were hoping to see improvement this season behind young players like Al Jefferson and Gerald Green. But their already tenuous playoff chances were damaged by season-ending injuries that included Theo Ratliff, Tony Allen and Wally Szczerbiak.
"I believe before everyone was injured we would have been in the playoffs," Rivers said after the season. "I think next year with health and with a little bit of roster improvement, we're going to be a playoff team. I think we're going to have a chance to win our division."
The Celtics won just two of 24 games when Paul Pierce went out with a foot injury, dropping 18 in a row to set a franchise record and make a run at the NBA mark of 24.
Rivers, who was the NBA's coach of the year with Orlando in 2000, helped the Celtics win the Atlantic Division in his first season in Boston before they lost in the first round of the playoffs in seven games to the Indiana Pacers.
"Doc did a good job," Ainge said after the season, "and that's why we'd like to keep him as coach of this team and give him a real opportunity and chance to coach."