The 49-year-old's position had become increasingly precarious after a winless run of seven Bundesliga matches - which leaves the 2009 champions in 13th place just four points above the relegation zone - and reached its nadir with a 3-1 German Cup home defeat by Second Division Cottbus on Wednesday.
However, the board gave McClaren, who is in his first season in charge after a successful spell at Dutch side Twente where he guided them to the title, backing after a heated two hour meeting on Thursday.
The players had already been punished for their poor run by having their Christmas holidays shortened.
McClaren, whose unsuccessful tenure as England coach ended when they failed to qualify for Euro 2008 and earned himself the unwanted moniker of 'the wally with the brolly' as he watched England lose at home to Croatia in the pouring rain, had expressed his frustration after the Cottbus defeat.
"I am angry and frustrated," said the former Middlesbrough manager, who was best known for being assistant to Sir Alex Ferguson at Manchester United.
"We have problems in the dressing room, and on the pitch. This club needs changes to be made," he said.
"Which ones? I don't know, it is not for me to judge, no-one knows what will happen in the days to come, but it is imperative that a clear signal is sent," the beleaguered manager added.