The 56-year-old's previous deal was due to expire after this summer's World Cup in Brazil.
Prandelli, who had been linked with a return to club management, took charge of the Azzurri in 2010 before guiding them to the final of the 2012 European Championships.
Italy get their 2014 World Cup campaign underway against England in Manaus on June 14.
Restore Data
| Team | P | W | D | L | F | A | GD | PTS | |
| 1 | Liverpool | 6 | 5 | 0 | 1 | 12 | 2 | 10 | 15 |
| 2 | Manchester CityMan City | 6 | 4 | 2 | 0 | 14 | 6 | 8 | 14 |
| 3 | Arsenal | 6 | 4 | 2 | 0 | 12 | 5 | 7 | 14 |
| 4 | Chelsea | 6 | 4 | 1 | 1 | 15 | 7 | 8 | 13 |
| 5 | Aston Villa | 6 | 4 | 1 | 1 | 12 | 9 | 3 | 13 |
| 6 | Fulham | 6 | 3 | 2 | 1 | 8 | 5 | 3 | 11 |
| 7 | Newcastle UnitedNewcastle | 6 | 3 | 2 | 1 | 8 | 7 | 1 | 11 |
| 8 | Tottenham HotspurSpurs | 6 | 3 | 1 | 2 | 12 | 5 | 7 | 10 |
| 9 | Brighton & Hove AlbionBrighton | 6 | 2 | 3 | 1 | 10 | 8 | 2 | 9 |
| 10 | Nottingham ForestNott'm Forest | 6 | 2 | 3 | 1 | 6 | 5 | 1 | 9 |
| 11 | Bournemouth | 6 | 2 | 2 | 2 | 8 | 9 | -1 | 8 |
| 12 | Brentford | 6 | 2 | 1 | 3 | 8 | 10 | -2 | 7 |
| 13 | Manchester UnitedMan Utd | 6 | 2 | 1 | 3 | 5 | 8 | -3 | 7 |
| 14 | West Ham UnitedWest Ham | 6 | 1 | 2 | 3 | 6 | 10 | -4 | 5 |
| 15 | Ipswich TownIpswich | 6 | 0 | 4 | 2 | 5 | 10 | -5 | 4 |
| 16 | Everton | 6 | 1 | 1 | 4 | 7 | 15 | -8 | 4 |
| 17 | Leicester CityLeicester | 6 | 0 | 3 | 3 | 8 | 12 | -4 | 3 |
| 18 | Crystal Palace | 6 | 0 | 3 | 3 | 5 | 9 | -4 | 3 |
| 19 | Southampton | 6 | 0 | 1 | 5 | 3 | 12 | -9 | 1 |
| 20 | Wolverhampton WanderersWolves | 6 | 0 | 1 | 5 | 6 | 16 | -10 | 1 |
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