The firm, which operates services across the West Midlands, said it would now operate up to March 2016.
The Department for Transport (DfT) said the process of awarding a contract beyond then had not begun.
In March London Midland announced it would shed 150 jobs, while in November it said driver shortages had led to cancelled or delayed services.
Figures showed about 20% of its 1,311 daily services were delayed or cancelled throughout October.
The firm has said the 150 redundancies would focus on head office and support staff and would not affect services.
A DfT spokesman said during the extra six months it would be "working closely with the company to ensure they continue to improve the service they provide to passengers".
The process had not yet started of awarding a so-called management contract to run from March 2016 to June 2017, the department said.
It added a new franchise was planned to run from June 2017, which also has not yet been awarded.
London Midland has had its franchise extended by six months, the train company has announced.