The German joined the club from RB Leipzig in January and immediately became a key starter.
Werner did end the season with an injury, but did enough to secure another loan at Spurs for next season.
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Timo told club media: "I see how good the club is, how good we are as a team and also, my perspective in the team, it makes it a really good place to stay.
When I got the call from the manager, it was clear for me that he is a person who is 100 per cent behind you if he wants you and that was, for me, in this moment, the most important thing.
"Also, the idea how he wanted to play and how he explained it to me fits very well with me. The players are all very kind, so that made it easy for me. I feel very good here. I like it a lot."