Leach has led WSU to a 5-5 record in his second season, 3-4 in the Pac-12, as the Cougars prepare for Saturday's game against Utah in Pullman.
That's the most wins for the Cougars at this point in the season since 2006.
"Mike Leach has done a fabulous job in his short time at Washington State," Moos said in a press release. "Extending his contract through the 2018 season will ensure a bright future for Cougar football."
The Cougars are one win shy of qualifying for a bowl game. They have not played in the postseason since 2003.
Leach was hired prior to the 2012 season and he signed a five-year contract that paid more than $2.2 million per year, plus incentives. He is the highest-paid coach in Washington State history.
Details of the new contract were not immediately released.
Leach owns a career record of 92-57 in his 12 seasons as a college head coach, the first 10 at Texas Tech.
Leach thanked Moos and Washington State President Elson Floyd for the extension.
"The support we have received from students, fans, alumni and the administration has been tremendous and by the end of this year we will have facilities that rival anyone in the country," Leach said, referring to a new football operations building under construction.
"As I've said many times, my family and I are extremely happy at Washington State and love living in Pullman," Leach said.
Leach was hired to bring his high-powered passing offense and winning ways to long-dormant Washington State. He replaced Paul Wulff, who was fired after going 9-40 in four years.
Leach went 3-9 last season, and just 1-8 in the Pac-12. But that lone league win was over archrival Washington in overtime in the Apple Cup.
This season, the Cougars have already posted wins over Southern California, California and last weekend beat Arizona. They also have wins over Southern Utah and Idaho.
Washington State could not have afforded Leach without revenue from the new Pac-12 television contract that will eventually pay each school up to $20 million per year, Moos has said.