On July 25, Beijing time, according to a report by Woj, Thibodeau and the Knicks reached an agreement on a three-year contract extension. Thibodeau has one year left on his contract, so the new contract will be in effect from the 2025-26 season and will run through the 2027-28 season. In the new season, Thibodeau will lead the upgraded Knicks to the championship.

The Knicks have a 50-32 record in the 2023-24 season and are second in the East, knocking out the 76ers 4-2 in the first round of the playoffs and losing 3-4 to the Pacers in the second round. Led the team to the Eastern Conference semifinals for the second year in a row, and many had expected Thibodeau to get a contract extension from the Knicks.

Thibodeau has coached the Knicks for four seasons, amassing 175-143 wins in the regular season and a 48.3% win rate in the playoffs with 14 wins and 15 losses. Thibodeau has coached three teams so far in his career, in addition to the Knicks, he has also coached the Bulls and Timberwolves, with a total of 916 regular season games in his career, 527 wins and 389 losses, a winning rate of 57.5%, and a cumulative 85 playoff games, 38 wins and 47 losses, a winning rate of 44.7%. Thibodeau was named Coach of the Year in 2010-11 and 2020-21.

In the 2023-24 season, the Knicks are one of four teams in the league that are in the top 10 in terms of offensive and defensive efficiency, the other three being the Celtics, Nuggets, and Thunder. In this season's Coach of the Year poll, Thibodeau came in fifth.

In the offseason, the Knicks brought in Mikal Bridges, kept Anunoby, and reached contract extensions with Brunson and Thibodeau. Thibodeau's coaching style is often questioned, as he always likes to let his main players play a lot of time, and new signing Bridges is a well-known iron man in the league and is considered a perfect fit for Thibodeau's style.

Thibodeau's contract extension amount has not been announced for the first time, but considering that Monty, Spo, Popovich, Budenholzer and Tyronn Lue have all been paid in eight figures since last spring, there is speculation that Thibodeau's new contract salary is also in the tens of millions of dollars per year.