Little's original contract was for two years plus an option for 2008. The club guaranteed that option and added a 2009 option. His annual salary has been estimated at $600,000, which would be in the bottom quarter of all managers, with Yankees manager Joe Torre's $7.5 million at the top.
"He's got a good chance to move up," said general manager Ned Colletti, who added financial incentives to the 2008 salary depending on how far the Dodgers advance in the postseason in 2007. "I had great expectations when I hired my first manager and he met them throughout the year."
Little, 57, guided the Dodgers to an 88-74 mark last year, a 17-game improvement from the previous year, and a share of the National League West title. His extensive player development background and understated homespun good nature provided a calming leadership influence on a team in transition after a tumultuous season that ended with the departures of field manager Jim Tracy and general manager Paul DePodesta.
"Grady's brought a lot to the club in restoring the pride and respect this franchise deserves," said owner Frank McCourt. "We'll raise the bar a little more, raise the expectations a little more."
Not having to go through a lame-duck season, as he did in his previous managerial stint in Boston, was appreciated by Little.
"Everything is good," he said. "It's a good feeling to know that he did this before this season started. He realized that. We have a chance to be good and be good for a while."
Little managed the Red Sox to a pair of second-place finishes in 2002-03, averaging 94 wins a season, but his image was tarnished by the Game 7 playoff meltdown against the Yankees, when his bullpen was shredded and he left ace Pedro Martinez in as the game got away. After his dismissal by the Red Sox, Little served as special assistant to the general manager of the Chicago Cubs.
His .568 winning percentage is best among all current Major League managers after spending 16 years managing in the Minor Leagues. He spent six years as a Minor League catcher and, after retiring, spent several years as a cotton farmer in Texas before returning to the game as a Minor League manager in the Baltimore organization.
When hired, Little became the 25th manager in Dodgers history, the seventh manager in Los Angeles Dodgers history and the fifth in the previous eight years. Little was selected by Colletti over four other candidates -- Atlanta Braves special assistant to the general manager Jim Fregosi, former Tampa Bay Devil Rays bench coach John McLaren, New York Mets third-base coach Manny Acta and Cleveland Indians bench coach Joel Skinner.
Colletti had never met Little until their first job interview, but they've grown professionally close and the general manager praised the manager for his integrity, resilience in the face of adversity and a willingness to play young players.
"Many times a general manager hires a friend. I chose not to do that," said Colletti. "What I saw, the way the answers came in his interview and his philosophy and how he would go about his job, he did all that, so I wasn't surprised by anything. It's rare somebody sets forth what they intend to do and you see it come to fruition."
Ken Gurnick is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.