Appointed in an interim role following the departure of Shane Bond in April, England-born and Australia-raised Mascarenhas had been retained on a two-year contract after New Zealand's bowlers impressed during the drawn 1-1 series.
"Dimitri has impressed in the short time he's been with the Blackcaps and we're delighted he's accepted the offer to continue working with the side," New Zealand Cricket's head of cricket Lindsay Crocker said in a statement.
"Both coach Mike Hesson and captain Brendon McCullum have been pleased with his contribution on the tour and have watched him develop excellent working relationships with the bowling group."
The 37-year-old played 20 one-day internationals and 14 Twenty20 internationals for England as an all-rounder, as well as being a stalwart for county side Hampshire before carving out a coaching career in New Zealand domestic cricket.
