Jones has a 78% win ratio since taking the role at the end of 2015.
"We have a great team and I am excited about raising the standards again," Jones said.
Eddie Jones watched England's football squad train on Friday
Image credit: PA Sport
The timing of the announcement comes in the midst of the coronavirus crisis, with many at the RFU and in the wider rugby community fearing for their futures.
"My thoughts and those of all of us at the RFU are with everyone impacted by Covid-19, both across the country at large but also within our own rugby union community. In exceptionally difficult times, we are pleased to be sharing some good news," said RFU chief executive Bill Sweeney.
Jones added: "The extension is a great honour for me, but in the current environment, it is only right to acknowledge what a difficult time the world is facing. We are all looking forward to a time when we can get back to playing rugby and use the sport as a force for good in bringing people back together."
Jones was appointed in December 2015, replacing Stuart Lancaster after a disappointing home World Cup that autumn. He led his side to the World Cup final in Japan last year, just falling short to eventual winners South Africa.