Pulis has enjoyed a solid few years at the Midlands club since he took over in January 2015 after replacing Alan Irvine.
After helping the club avoid relegation for several seasons, Pulis guided West Brom to a 10th-placed finish last season in the Premier League.
The former Stoke City and Crystal Palace coach was under contract until 2018 but he has now decided to extend his deal after talks with chairman John Williams.
After signing his deal, Pulis said: "I'm delighted to extend my contract because it continues the stability within the club which is essential for its progress.
"I've said all along that we are in a building phase which requires a step by step process. I think we've seen an improvement all across the club in recent seasons and we must continue that in what is such a tough, tough league.
"Having spoken to John at great length over the summer, we know this club has a direction it needs to follow and we are determined to do that."