McCarthy is understand to be on a one-year rolling contract and has performed wonders since taking charge at Molineux four years ago when Wolves, according to chief executive Moxey, were a "club in crisis."
He took Wolves to the play-offs against all odds in his first season, guided them to the Championship title 12 months ago and has kept them in the top flight this season with two games to spare.
Moxey said: "Mick has been central to everything we have done from a football point of view. He took over a club that was in crisis.
"Part of our plan when we appointed Mick four years ago was to take the club and rebuild it, take it to the Premier League and stay in the Premier League
"We set out a plan of where we wanted to go and Mick has delivered at every turn and we couldn't be more happy with what he has done.
"I hope personally Mick will be with us for a very long time.
"He has got to want to do that as well and I think he is enjoying the job he is doing and looking forward to the challenge ahead, which is a big one."
Moxey also pledged money will be made available for new players after Wolves spent a club record £6.5million on striker Kevin Doyle.
He said: "We are going to continue to invest in players as we always have done. This club has a public record of supporting its managers and spending money.
"We realise that we have to continue to improve the team and we will look to bring players in and that will cost money. Very good players cost a lot of money.
"We are not restricted by saying 'we will not spend a certain amount of money.' I think more to the point is what Mick has already said in terms of 'can you get the players you want?'
"We know players cost money in terms of transfer fees and wages and they are very expensive.
"But everyone was surprised when we signed Kevin Doyle and what we spent on him and the wages we had to pay and the competition there was for him.
"We would certainly like to one or two quality players in the summer if we can and we realise it costs money to do that. It is part and parcel of what we do."