The renewal of Ailes' contract will be seen as a major boost for the company, given that News Corporation's TV channels are among the hardest hit in the economic crisis as advertisers cut back on spending money in local TV.
The dawn of a new presidential era is also being viewed as an opportunity for the cable news network to reclaim its heritage as the US' alternative news source.
Ailes is the chairman and chief executive of Fox News. He oversees the Fox Business Network, Fox's local TV stations, MyNetworkTV, and Twentieth Television and the new contract will see him retain these responsibilities.
It is not known what the value of the new contract is worth, but Ailes reportedly earned almost $20m (£13.5m) last year.
Ailes' renewal comes at an important time for Fox News, as it adjusts to the incoming Democratic administration in Washington and introduces two evening programmes.
Last month the network hired Glenn Beck, formerly of Headline News, to host a 5pm programme, to air early next year. The network recently signed new contracts with two of its most prominent hosts, Bill O'Reilly and Sean Hannity.
Fox News has been an important engine of growth of the News Corporation for most of the decade, earning $460m (£310m) in net advertising revenue in 2007, making it more profitable than the lower-rated channels CNN or MSNBC.
Murdoch said about the local TV market in the US, earlier this month: "It is a pretty grim picture for all local television stations across the country, whether it is ours or other people. But we are fighting it very hard every moment of the day."
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