Reading confirmed Paul Ince as their permanent manager for the 2022-23 season on Monday, after the former England, Manchester United and Liverpool midfielder helped them avoid relegation from the second-tier Championship.
Ince, 54, began his spell in charge of the club on an interim basis in February, following the sacking of Serbian Veljko Paunovic.
Reading added that Alex Rae will also continue at the club as assistant manager.
"(Ince) had to produce almost immediate results," Reading chief executive Dayong Pang said in a statement.
"Fourteen points from their first ten games proved enough to keep the club in the Championship and I am delighted that Paul and Alex have accepted the challenge to take this club forward."
Reading were handed a six point deduction with immediate effect in November last year after admitting to exceeding profit and sustainability limits.
They finished the season in 21st place, four points above the relegation zone.