The contract extension complicates his speculated succession into the Wallabies head coaching position, which Robbie Deans is expected to vacate in 2013.
However, Reds chief executive Jim Carmichael says the Reds would be prepared to be flexible and discuss such a plan with the Australian Rugby Union, should McKenzie be sounded out for the national job at that time.
McKenzie has been touted as a future Wallabies mentor for some time, and his claims have been boosted significantly by the achievement of taking the Reds from cellar dwellers to Super Rugby premiers within two years.
Carmichael said McKenzie's decision to stay at the Reds through to the end of 2014 was significant, and praised the coach for bringing much more to the organisation than just wins on the field.
"It's vitally important for our strategies to be achieved to have a head coach who understands what we're trying to build for this industry and we're very fortunate to have that in Ewen," said Carmichael.
"I haven't been in rugby very long, but I'm of the firm belief that if we were to have another coach at this stage of our plans, we wouldn't be able to achieve the same levels of penetration that we've experienced over the last two years.
"Nor would I have the same confidence that we can deliver on our next three-year strategic plan."
McKenzie said his decision to stay on at Queensland Rugby was simple.
"We've done a good job the last couple of years, but there's still a lot of work to be done and a number of challenges ahead in the current landscape," McKenzie said.
"As you've seen, we're already working around the 2014 window with the recent re-signing of Digby Ioane, Jake Schatz and Adam Wallace-Harrison.
"We're currently doing a lot of planning in and around this space and it was an easy decision to give my commitment, along with Jim and Rod, to seeing the job through.
"We have a good idea of what lies ahead and what needs to be achieved in Queensland in terms of the future success of our Code and I have given my commitment to being part of it."