The new three-and-a-half-year contract with Watford will keep him at the club until 2014.
“I’d like to remind all of our fans that when we first appointed Malky, we, as a board, made it very clear that we felt it important we should stand firmly behind our manager at all times and, as such, gave him a three-year contract,” chairman Graham Taylor told the club’s official website.
“Malky’s willingness to accept the challenges that face him and buy into the philosophy we have for Watford Football Club has been admirable.
“I think supporters have seen a man at work who genuinely cares for the well-being at Watford, having first established ties with us in 2005.
“Alongside him, Sean’s association with this club dates back to 2002, when he first joined as a player under Ray Lewington.
“So we have secured the services of two men who want to put the future of Watford first in everything they do. That has to be a positive at a time when many other things in football are changing.”