However, he spoke earlier this month about his frustration at a lack of funds for team strengthening this summer.
Walsall chairman Jeff Bonser told the club's official website: "Richard came to the club at a very difficult time, when we'd just been relegated to League Two, and our playing fortunes were at a low ebb.
"During these past two years, through a great deal of hard work, he's led the club to the League Two Championship and to a position just outside the League One play-off positions, a very impressive achievement.
"We'd like to place on record our appreciation for the work that Richard has undertaken for the club, and to wish him well for the future."
Assistant manager Jimmy Mullen has been placed in caretaker charge of the first team.