"We have one of the great young coaches in the league," Riley told a news conference. "We wanted to extend him and keep him in the family and not have someone steal him away from us."
Contract details were not announced.
Spoelstra, 41, has compiled a 148-98 record in three seasons as Miami's coach. He led the Heat to the Eastern Conference championship and a 58-24 regular-season record in their first season with James, Chris Bosh and Dwyane Wade playing together.
"He is somebody who is very innovative, he's not afraid to take some risks," Riley said. "It's paramount for him to develop a relationship, a real relationship, with his key guys, and he does that extremely well."
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