Sources close to David Cameron have described it as a "huge vote of confidence" in her performance.
Ms Morgan, a trustee of the Conservative Christian Fellowship, first took the role in July 2014 from Michael Gove, who has been appointed as the new justice secretary.
Nicky Morgan, the MP for Loughborough, faced criticism from within her own party when in 2013 she voted against the introduction of same sex marriage in England and Wales, claiming marriage could only be between a man and a woman.
In December she told Conservative Home: "As a Christian Secretary of State for Education, I will oppose secular, politically correct dogma".
She said she attended a "very, very bog standard C of E, if that's a technical term, I'm not sure the Archbishop of Canterbury would necessarily know that, but you know what I mean, neither high church nor very low church, I mean you know very, very middle of the road Anglican."
She added: "For me personally, it's part of my value system, I suppose. I think there is still a reluctance to talk about one's own personal faith in politics.
"At the end of the day you have got to represent everybody. I have a personal faith, but that's not going to dominate every decision I make in relation to my constituency or to my ministerial post.
"But I also think people should be free to be open about their own personal faith. Or lack of personal faith. In terms of more broadly, Britain is still, I think, a basically Christian country. The Prime Minister's said that recently.
"The King James Bible and many other Christian tracts or Christian practices are a huge source of the things that we believe in this country.
"You think about the wording from the Bible and the music and art and all sorts of things.
"And as an Education Secretary I'm a huge supporter of faith schools, a huge supporter of Church schools, I think that our education system owes a massive amount to the Church of England and to the Catholic Church.
"But I also think we can't ignore the fact that we now live in a country where lots of other religions and none are practised.
"And that's why I think that our education system has to offer a broader balanced curriculum and has to open all of our young people's minds to everything in modern Britain."