I'm glad someone asked because it gives me a chance to talk about how manager contracts are set up and how to look at them in terms of being written to be revised before the final year.
There is a sense in baseball that managers, GMs, and POBOs upon entering the final year of their contract are effectively (well, actually they are literally) lame ducks. Does that change their authority in which they can act? Or, does it change the clubhouse's view of that manager? If they don't have the support of the ownership beyond this year, does that mean the clubhouse can just outwait the coach?
That view informs how contracts are written.
And you see throughout baseball the arrival of the final year for most -- not all, because TLR did go year to year for awhile -- managers/GMs/POBO is the invitation for an extension. It's set up that way.
I hope I can articulate this well. Manager/GM/POBO contracts are guaranteed. So, when any of them are fired before the expiration of that contract, they are paid what they are owed over the life of that contract. That's important here because you have to think about of a manager's contract in terms of salary, not necessarily years. And they are definitely written to allow for the raise/extension before the final year.
If a manager is going well, then the team will want that window for an extension, and by overlapping with the final year the manager gets the raise, the team gets that year baked in.
If a manager isn't going well, then teams have calculated that they can move on, pay double salary to that one position for a year (or so), and then adjust the next time the contract comes up.
For example, a manager could sign a three-year, $3-million deal, but effectively a team sees that as its willingness to spend $1.5m per year on the manager and then move on -- or give him a raise that includes some of that guarantee, and moves the contract out another two years.
We sometimes see this in player contract, especially for veterans. When the Cardinals signed some recent veterans -- Jhonny Peralta comes to mind -- they made that last year of the deal a salary they could move or payout, effectively saying they think he'd meet the production they're paying for in one year less than the life of his contract, and then could walk away from the deal having gotten the return they expected.
TL; DR: The possibility of an extension before the final year of a contract is baked into the that contract for a manager, GM, or POBO -- on both sides. The team calculates what they're willing to pay the manager and knows it might be for one year less than the contract if it doesn't go well. The manager/gm/POBO knows that the final year of the contract, if all goes well, can be rewritten for a raise while included in the length of his next deal.
Hope that helps.
I'll try to briefly touch on your specific questions, more directly:
Q: How many additional years would you give him?
-- From the above, I hope you can see how the trend would be two on top of the one that's already there. Other contract extensions will set the market. Years ago, the Cardinals had to respond to Francona's extension in Cleveland when they awarded Matheny one in STL.
Q: Why does Shildt need to be extended right now?
-- I hope I explained that above.
Q: Why can’t they talk extension after his current contract expires?
-- They can. But then he's a free agent, and they don't have exclusive rights to negotiate with him, and he'll have spent a whole season with what passes for faith/confidence in him, so you tell me what message he should take from that and maybe he'd be open to going to the highest bidder. It's a risk on both sides, but in an industry where dollar signs are a show of value/importance to the team, what's the message sent here. I hope some of this was also explained above as well.
Q: Isn’t this how we get ourselves in trouble?
-- No. Player contracts are way different. There is a CBA governing them. A manager/gm/coach/POBO can just be paid out and move on. See this all the time.