The legal formalities are expected to be completed before Leicester begin the defence of the Premier League away at Hull on Saturday. It is understood Ranieri's new deal does not include a compensation clause should other clubs come calling.
The 64years old appointment as Nigel Pearson's successor was not welcomed wholesale by Leicester supporters 12 months ago, but his achievements earned him the League Managers' Association's annual award in May.
The champions have managed to maintain the bulk of their squad ahead of the new season, with top scorer Jamie Vardy turning down the chance of a move to Arsenal.
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