Makelele joined on a short-term deal in January following the appointment of Paul Clement as manager.
The 44-year-old has signed a new contract after Swansea secured their Premier League status.
"We are very happy that he is going to be staying on because he is very popular," Clement said,
"He is a quiet, humble man considering what he did as a player. He has great experience and he has passed that on to the players."
Makele won 71 caps for France and played for Real Madrid, Chelsea and Paris Saint-Germain.
Former Chelsea and France midfielder Claude Makelele has signed a new contract to stay on as Swansea City assistant manager.