Terms of the deal were not disclosed.
"Craig made an enormous impact on our team when he took over last November," general manager Doug Armstrong said in a statement. "He restored our identity and provided our players with a clear sense of direction and purpose. The chemistry and trust that he developed with our players was integral in bringing our franchise the 2019 Stanley Cup."
Berube, 53, was made interim coach after Mike Yeo was fired 19 games into last season with the Blues sitting at 7-9-3. A turnaround didn't happen immediately. At the beginning of January, the Blues had the worst record in the league.
From New Year's Day to the end of the regular season, however, St. Louis went 30-10-5 for the best record in the NHL. The Blues beat the Jets, Stars and Sharks on the way to the Stanley Cup Final and then outlasted the Bruins in seven games for the franchise's first title.
Berube was a finalist for the Jack Adams Award as the coach of the year. The honor went to the Islanders' Barry Trotz.
"This is a proud day for me and my family," Berube said Tuesday in the statement. "I have a tremendous amount of respect for this team and this organization and the city of St. Louis has embraced me as one of their own. This past season was the experience of a lifetime and I'm anxious to get started on our title defense."
Berube, who will discuss his new contract during a news conference Wednesday, spent 17 seasons with five organizations as an enforcer in the NHL. He turned to coaching upon retirement, joining the Flyers' affiliate in the American Hockey League for the 2006-07 season. His stay in the minors didn't last long. Berube was promoted to assistant coach of the NHL team.
Berube returned to the farm team the following season, then got his break as a head coach in the NHL early in the 2013 season. And while he guided the Flyers to a playoff spot that season, his tenure ended ignominiously when general manager Ron Hextall fired him in April 2015.
Once again working his way through the AHL, Berube joined the Blues' affiliate in Chicago before becoming an assistant coach in St. Louis. He was elevated to head coach in November, then joined Blues adviser Larry Robinson (New Jersey) as the only interim coaches to win the Cup.
Also Tuesday, the Blues said forward Vladimir Tarasenko had a "successful arthroscopic procedure'' on his left knee and will be re-evaluated in four weeks. The 27-year-old Russian forward had 33 goals in the regular season and added 11 more in the postseason.
Information from The Associated Press was used in this report.