According to this report at ESPN, Phil Jackson and the Lakers are close to having a two-year extension to his current contract done. His original five-year contract runs out after this year.

I'm pretty happy to hear this, not so much because I think Jackson is a great coach, but because keeping him around will likely keep Shaquille O'Neal around.
O'Neal's said before that he's unlikely to continue playing after Jackson is done coaching the team, so Jackson's imminent contract termination worried a lot of Laker fans.

What I wonder is what this does for Kobe Bryant, assuming he's not put in prison for twenty years this spring. Kobe has chafed at Jackson's reins numerous times, and their relationship hasn't been as strong as Jackson and O'Neal's has been. Then again, Kobe probably wouldn't get along with any coach that tried to constrain him in any way. If he realizes that and realizes that his best chances to seal his place in the mythology of the game is by winning championships with Shaq, then it might help the Lakers by convincing him not to opt out of his contract when he can (after 2005, I believe).

Then again, who knows what Kobe believes and doesn't believe. Maybe he thinks he can carry a team like the Grizzlies to a championship and thereby cement his place in the basketball pantheon.