The former Wales flanker was appointed Director of Rugby for the Dragons in June 2013 after his time as head coach at London Welsh.
Following his appointment in 2013, Jones set about reshaping the squad ahead of a much improved 2014/15 season that saw many firsts being achieved, despite a difficult start.
The Welsh Region recently made their way to the semi-final of the European Challenge Cup, doing the double over French giants Stade Francais and recording their first European victory on English soil against Newcastle Falcons, thus finishing top of their pool. The subsequent home win against arch rivals Cardiff Blues in the next round complimented their first away win in 11 years at Cardiff Arms Park earlier in the season.
Commenting on his new contract, Jones said: “I’m delighted to extend my stay at the Dragons. The first two years have been about change, but the next two will be about re-gaining respect in the world of rugby through consistent performances and results. We have all witnessed the potential here with so many ‘firsts’ this season.
“The Dragons squad, Board and management team are good people and I look forward to September with much excitement in helping them achieve their goals.”
Chief Executive Stuart Davies added: “Lyn heads up an excellent all-Welsh rugby management team overseeing a very exciting squad here at the Dragons. Our younger players are in great hands as we look to build on a very promising season in the years ahead, and Lyn has earned the opportunity to lead the side as we seek to further enhance a growing reputation.”