Bilek has agreed a 12-month extension to his current deal, with the option of a further year.
The new deal will keep the 47-year-old in charge of the national team until after the 2014 World Cup.
“The worst thing is to play a waiting game. If you succeed, we want you; if you do not then you can leave,” said Miroslav Pelta, president of the Football Association of the Czech Republic.
“This is wrong. If you trust somebody, you have to tell him. This is a signal of trust towards our coach, the players and the public.”
Bilek added: “We’ve put together a team that has character and may achieve something great, so I was interested in continuing. I’m glad we have agreed a new contract.”