Tennessee athletic department spokesman Eric Trainer confirmed the extension and raise, which were first reported Tuesday night by the Knoxville News-Sentinel.
Warlick's contract now runs through March 2017. The raise increases her total annual pay to $550,000.
Warlick went 27-8 in her first season after taking over for Pat Summitt, who won 1,098 games and eight national titles in 38 seasons at Tennessee. Warlick played for Summitt at UT and worked as her assistant for 27 seasons.
Warlick won the Maggie Dixon Award given annually to the nation's top Division I rookie coach.