Carter, 38, had been named as interim manager last November following the dismissal of Scott Booth.

"My full focus is driving this team back to where it belongs in the Women's Super League," Carter said.

"We want to be competing at the top level, and that is the drive for us now. My drive and passion for this team has only got stronger."

Carter formerly coached at West Bromwich Albion as well as with the Solihull Moors men's team.

Blues Women's general manager Sarah Westwood added: "We are delighted that Darren has extended his stay with the club and look forward to continuing our work with him over the next two years.

"Darren knows what it means to play for Birmingham City, and we have already seen that passed onto the players during the second-half of last season.

"Darren's ambitions match that of the cub and we are excited to enter this new period with him in charge as we look towards a successful season in the FA Women's Championship."

Potter made over 100 appearances for the club and said joining the coaching staff "is surreal".

"I've always got Blues in my heart," she added. "It didn't take much convincing for me to come back."

Previous assistant head coach Tony Elliott will now be lead goalkeeping coach, a role vacated by Daniel Matraszek who has left the club.