The former St Mirren boss guided the Bully Wee to promotion via the play-offs in May and they have made a good start to life in Ladbrokes League 1.
Clyde chairman Clyde chairman David Dishon told the club website: "We are delighted to secure Danny on a well-deserved new deal as he is a much sought-after, talented manager.
“He is an integral part of the club and has captured the hearts of everyone here with a fantastic couple of years, helping to turn the club around.”
