According to AS, the former Malaga man's new and improved deal is for four years and the option for another season, with the contract signed last month prior to Real's pre-season tour of the United States but kept under wraps.
Since joining Real Madrid, Isco has won three Champions League titles and La Liga once, the Super Cup three times and the Club World Cup twice as well as one Copa del Rey.
The 45-year-old former France global, who managed Real's B team before replacing Rafael Benitez in January 2016, added: "You can sign for 10, 20 years".
"I don't have a termination clause". There will never be any arguments between Madrid and myself.
"Some day that will end but my relationship with Real Madrid does not depend on contracts or money".
However, although he showed a refreshing display of the realism which has characterised his time as first team coach, Zidane said he was "happy for the confidence shown in me and for having worked well". I know where I am and what to do.
Following their meeting in the Miami El Clasico a few weeks ago, Barcelona and Real Madrid will face-off tonight in the first leg of the Spanish Super Cup.
"He is ready and doing well".
"He is very good, he has had his holidays", said Zidane.
Zidane also spoke about the world-record transfer of Neymar to Paris Saint-Germain and warned that Barcelona would still be a unsafe opponent even without the mercurial Brazilian. "We know how they play and their idea of how to play isn't going to change", Zidane.
However, the fixture will be the first major game Barcelona will have played without Neymar Jnr at the club.
"You can not simply replace him but whoever steps in, I'm certain they will bring something special".