Di Matteo led the club to promotion to the Premier League last season where the Baggies have impressed this season.
“I am very happy where I am and very grateful for the opportunity I have been given here,” said Di Matteo.
“You can’t have a long-term plan as a manager because you have a few bad results, you get questioned and then you get a ticket for your holidays.
“But my staff and I are very ambitious.”
