The 50-year-old succeeded Stephen Robinson in charge of the Fir Park side a year ago and has been a roaring success, transforming the squad and leading them to fourth place in the cinch Premiership more than halfway into the current campaign.
Alexander made 421 appearances as a player for North End in two spells, the vast majority between March 1999 and August 2007.
He had a spell as joint caretaker manager of PNE with David Unsworth in the 2011/12 season, and went on to manage Fleetwood, Scunthorpe and Salford.
"Chris Lucketti and I have received nothing but great support from everyone connected with the club, which has certainly helped us concentrate on our work.
"I have a brilliant relationship with the people I work with every day, and the environment that we're allowed to develop here to produce results is particularly rewarding.
"I also want to thank the chairman and the board for showing the faith in us from day one to be a success in this role.
"We know we have much more to achieve here. We will strive to work as hard as ever to serve Motherwell in the best way."
Highlighting Alexander's impact further, he is the first manager outside of Celtic and Rangers to win three Premiership Manager of the Month awards in a calendar year.
Motherwell chairman Jim McMahon said: "We have been absolutely delighted with Graham's contribution since joining our club 12 months ago and we are excited about what he is trying to build with us.
"He is talented, hard-working, dedicated and fully buys into the multi-faceted role at Motherwell.
"The board will continue to back him to help us achieve our goals both on and off the pitch."
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