Teague took over the role after the dismissal of Brendan Bolton in June.
Since then, the Blues have played a much more competitive brand of footy, boasting a 5-4 record under the stewardship of Teague.
The 38-year-old has quickly gained the support of fans and players alike after instilling a free flowing, attacking game plan after Carlton started the year with just one win.
“While I am proud to be given this great opportunity to coach our football club, my overwhelming feeling is excitement for what we can achieve together,” Teague told the club website.
“The support that not only myself, but our entire playing and coaching group have felt, is a real sign that the entire Carlton family believes in the direction we are heading.
“I will be giving everything I have to see our club achieve success and I have no doubt our players will give their heart and soul as well. Off the back of the incredible support received so far from our fans, I’m confident that our unity as a football club is one that is capable of delivering our members premierships.”
According to The Age, that the Blues only considered Teague and Port Adelaide assistant coach Michael Voss for the role.
Teague’s appointment comes after comments from Carlton football director Chris Judd, who said on Channel Nine’s Footy Classified, that the Blues would not appoint someone “with training wheels on”.
The comments were initially seen as dismissive to Teague being considered for the role of senior coach due to his lack of senior coaching experience, however Judd later clarified he had not meant to remove Teague from consideration.
Teague’s first test as permanent coach comes against Ratten’s Saints on Saturday at the MCG.