The permanent appointment comes a month after the 36-year-old ex-Canberra, Parramatta and Melbourne playmaker was brought in as acting head coach.
In his first four games in charge the Warriors have had two hard-fought losses followed by impressive wins against Melbourne and Canberra to sit just outside the NRL's top eight.
On Saturday McFadden guided the side to a nine-try 54-12 rout of the Raiders, a club record winning margin against Canberra.
This followed the 16-10 Anzac Day victory over the Melbourne Storm, one of the most complete displays in the club's history.
McFadden welcomed the long-term responsibility.
"I'm hugely appreciative of the club giving me this opportunity," said McFadden.
"The past few weeks in the job have given me a valuable insight into the role and its demands. To have the position through to the end of 2017 gives me certainty and the chance to plan our future with confidence.
"It's an exciting challenge for all of us as we seek to make the Vodafone Warriors a consistent force in the NRL. There's so much talent in this club but there's also so much work needed if we're to rise to the level we expect."
Since McFadden took over the Warriors have shown vast improvement in both their level of effort and effectiveness in defence. In the past four matches they have conceded a total of just 63 points, an average of less than 16 points a game compared to an average of almost 28 in the first five rounds of the season.
Warriors owner Eric Watson said McFadden had done an outstanding job in transforming the side.
"I spent some time with Andrew when I was back in Auckland recently and we've had regular contact since," he said.
"I had the greatest confidence he was the right man to bring about the changes needed when he was appointed last month.
"We had a view when Andrew joined the club that he would develop into the next long-term head coach. He has already underlined the ability he has and we couldn't be more delighted to confirm his long-term future with the Vodafone Warriors."
Scurrah said today's confirmation gave McFadden the opportunity to not only focus on the rest of the 2014 campaign with confidence but to also work with clarity on the 2015 season and beyond.
"We're already working on recruitment and other plans and it's critical to have Andrew fully involved as we map out our future," he said.
McFadden's first match as the club's fully-fledged head coach is ironically against the same team he made his NRL coaching debut against - Canterbury-Bankstown - at Eden Park on April 13.
On that occasion the Bulldogs stole a 21-20 win after the Vodafone Warriors had led 20-18 inside the last 10 minutes of the contest; the performance represented a quantum leap from the 6-37 loss to Cronulla a week earlier.
The Bulldogs have gone to the top of the competition since the Eden Park match, taking a run of six consecutive wins into Sunday's encounter at Waikato Stadium (4pm kick-off).
