Should he stay up until the end of the deal, it will signal a decade of "Kloppo" at Signal Iduna Park, having first been appointed in May of 2008.
It puts to bed speculation brought forth from The Guardian this week that he'd be making the move to the Premier League rather soon, and it kills suggestions that his significantly improved English is a marker for his short-term plans.
It's a genius move by the BVB hierarchy, one the English media thought impossible, as securing Klopp for another five years means securing the club's "x-factor" for five more as well.
The year before taking the reins at Dortmund, the club had finished in 13th place under Thomas Doll. Klopp started by winning the DFB Super Cup against Bayern Munich in his first game, and there's a certain romanticism in that Jakub Blaszczykowski—a first-team player to this day—scored the opening goal for his side.
Since then, BVB have been an irresistible, upwardly mobile force. Klopp possesses an aura, and as long as he's around, Dortmund face no threat of falling out of the reckoning for titles.
Back-to-back Bundesliga wins in 2011 and 2012 had Bayern fans concerned they'd been replaced as the top dogs of Germany, and die Schwarzgelben's run to the UEFA Champions League final last season was nothing short of sensational.
Klopp has made unprecedented steps in trying to parallel another Bundesliga club alongside Bayern Munich, and the remarkable thing is that he's loved every ounce of pressure, expectation and attention.
Thrust into the public eye, Klopp thrives. As a result, his team plays with no fear, trusts his immense tactical brain and follows his every word. Who else throws Mats Hummels on with a minute to go against Malaga when you need two goals?
His record in the transfer market is phenomenal, as for many years BVB have utilised immense care after going close to broke in 2005.
The aforementioned Hummels was acquired from Die Bayern in 2009 for as little as €4 million—a transfer that stings to this very day—but perhaps the major turning point was the signing of Marco Reus.
After an astonishing 2011-12 season with Borussia Moenchengladbach, Reus had the choice between BVB and Bayern. He chose the former, and although he was raised in Dortmund, this simply isn't the status quo. The best players go to Bayern.
Jupp Heynckes exacted revenge by activating Mario Goetze's release clause at the tail end of last season, and soon Robert Lewandowski will join the ranks at the Allianz Arena.
It's a battle, a true rivalry—one of the finest in world football at present.
Klopp attracts the finest players and preaches fantastic football. He's the face of modern-day Dortmund and provides an extremely likable under-layer to a traditionally great team.
Twenty-year veteran fans of the club may not agree with that, but Klopp has been a major factor in launching the Dortmund project into the hearts of many international fans.
It's difficult to imagine him anywhere else in the foreseeable future, and it's fantastic that he's opted to stay.