The Titans announced the deal Sunday, hours after the NFL Players Association approved a new collective bargaining agreement.
"Tennessee let's run it back," Tannehill wrote on Twitter.
After being traded by Miami to Tennessee last March, Tannehill went 9-4 overall as a starter, 7-3 over the final 10 games of the regular season after the Titans benched Marcus Mariota in mid-October. Tannehill led the NFL with a career-best 117.5 passer rating, the fourth highest in NFL history and a franchise best.
Tannehill threw for 2,742 yards with 22 touchdowns and six interceptions during the regular season. His 9.6 yards per attempt also led the league as another team record. He also set a team mark for completion percentage, completing 70.3% of his passes for third overall in the NFL. He also ran for 185 yards with four TDs on 43 carries.
He helped lead the Titans to their first AFC championship appearance in 17 years as the No. 6 seed with road wins at New England and Baltimore. They lost 35-24 at Kansas City one win short of the Super Bowl.
Tannehill earned his first Pro Bowl nod and was The Associated Press NFL Comeback Player of the Year.
This extension now allows the Titans to either franchise tag NFL rushing leader Derrick Henry or sign him to an extension.
Henry led the league with 1,540 yards on 303 carries and became the first in the NFL to run for at least 180 yards in three straight games over the regular season or postseason. Henry had seven 100-yard games over his final nine games, and he ranks third in NFL history averaging 126 yards rushing for his career in the playoffs.
The Titans cleared up more salary cap space by waiving linebacker Cameron Wake and running back Dion Lewis on Thursday before waiving three-time Pro Bowl tight end Delanie Walker and kicker Ryan Succop on Friday. Spotrac.com projected the Titans with having more than $63 million in salary cap space after those moves.
Keeping Tannehill certainly helps their prospects. But the Titans still have right tackle Jack Conklin and cornerback Logan Ryan among the handful of players hitting free agency when the new league year begins, currently scheduled for Wednesday.
Tennessee had been considered a team that would chase Patriots quarterback Tom Brady if the six-time Super Bowl champ hits free agency, Brady has a friendship with current Titans coach Mike Vrabel, a former New England teammate. But Brady turns 43 in August, and Tannehill turns 32 in late July.
Henry made clear which quarterback he wanted when asked about Brady and Tannehill on "Bussin' With The Boys" podcast last month.
"Speaking for everyone on the offense, we fed off of him ...," Henry said of Tannehill on the podcast. "Ryan Tannehill is our quarterback and went to the AFC championship. Why would we not want Ryan back?"
Tannehill was the eighth overall pick in the 2012 draft and spent his first seven seasons in Miami before being traded away.
He has started 98 games in eight seasons, plus three in the playoffs, going 51-50 overall. Tannehill has a career passer rating of 89.8 having thrown for 23,176 yards, 145 TDs and 81 interceptions. He has run 291 times for 1,396 yards and 10 TDs.
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