Coppell usually just signs a one year externtion each time but he's taken a loing option this year.
"For the club to have faith in me is pleasing, now I want to repay that faith by doing my job to the best of my ability," said Coppell.
Chairman John Madejski was delighted
"We're highly delighted that Steve has agreed this new contract.
"He is widely regarded as one of the most respected and successful managers in football.
"The fact that he has pledged his future to Reading gives the players, staff and the whole club a great deal of security for the next two years.
"Steve and I have an exceptionally good working relationship and I always had complete confidence that he would sign this contract.
"He has obviously played a vital role in our success so this is a real red letter day for the club.
"We look forward to continuing to work together and taking Reading even further."
Coppell has taken the Royals into the top 8 of the Premiership, and with just 8 games to go this season they are in contention to grab a European place as well.