"Here's a Christmas present," Ross told reporters, according to The Palm Beach Post. "You don't have to ask me anymore. He has one year left on contract and is coming back."
Philbin, who currently owns a 23-24 record as coach of the Dolphins, was thankful for the owner's backing.
"Steve Ross has shown a lot of support for me through the years even in difficult times," Philbin said, via The Miami Herald. "I'm very grateful."
Philbin has coached Miami during Ryan Tannehill's first three years in the league. The quarterback supported the organization's decision.
"I'm happy to hear he's coming back, and I look forward to working with him," Tannehill said.
The decision was announced on the same afternoon the Dolphins were eliminated from postseason contention for the sixth consecutive season.