The Clarets boss penned a new four-and-a-half year contract worth £70,000 a week to cement his place as the club’s highest earner.
Dyche, 46, was on a 12-month-rolling deal worth around £2.5m a year but will now see his wages rise by about £20,000 a week.
Clarets chairman Mike Garlick was keen to reward Dyche for Burnley’s stunning rise which has taken them to eighth in the Premier League.
“It’s something that the chairman felt was important,” said Dyche, who was recently linked with both Everton and Leicester.
“The chairman spoke to me over the last couple of months and said to me, ‘What are your thoughts?’
“We had a good chat about where it’s all at, the continued progress and how to get there and he felt a big part of it was me staying.
“I’m very pleased to have come to an agreement which works for everyone.”
Dyche, who joined Burnley in 2012 and led them to promotion to the Premier League in 2014 and 2016, will spend a decade at Turf Moor if he sees out his new deal.
“I don’t think the future of management is staying at a club as long as I’ve stayed already, never mind going beyond that,” he said.
“The demands now are so instant that it’s going to get more and more difficult. The coaches of the future may be nomadic, they just pop in and pop out of clubs.
“The demands are so high that I don’t think the future of management is long term. It’s going to be shorter and shorter. Not to the point of chaos, but it will be one-season style management.”
New signing Aaron Lennon believes he has plenty more to offer after his move from Everton.
The 30-year-old winger completed his medical yesterday having been deemed surplus to requirements at Goodison Park following the arrival of Theo Walcott last week.
The former England and Tottenham player, who missed the final three months of last season after mental health issues, said: “I’ve still got a lot to offer. I am only 30 and I still want to play at the highest level.
“I have missed a bit of football in the last year or so and I just want to get back and play as much as possible.
“Burnley was the club I wanted to come to and I can’t wait to get started. I’m looking forward to playing here.
“The club is moving forward and I want to play a part in that to keep it going in that direction.”