The Washington Wizards are set to conclude the worst four-year stretch in franchise history — a period that has seen Gilbert Arenas bring guns to locker room, the team mistakenly build around a core of Andray Blatche,JaVale McGee and Nick Young, and continuous turnover for players and coaches. The shortcomings led to speculation among fans, agents, executives and scouts that the one constant through all of it — Ernie Grunfeld — wouldn’t return after his contract expired after this season.

But on the day that Wizards owner Ted Leonsis formally announced that his embattled team president was staying to lead the franchise’s efforts to rebuild, Grunfeld responded to a question asking whether he deserved another shot by smiling and saying, “The important thing is, Ted felt that.”

Leonsis’s opinion was the only one that mattered as it related to Grunfeld, who celebrated his 57th birthday on Tuesday by signing a contract that will keep him with the team for more than one year and with the organization through at least the end of the 2013-14 season, according to sources with knowledge of the situation. And for the two years Leonsis has owned the team, Grunfeld has followed through on orders to build through the draft, acquire young talent and keep the team financially flexible going forward.

Leonsis did not attend Tuesday’s news conference to announce the move, but explained his decision to keep Grunfeld on his personal blog, Ted’s Take. He wrote: “Ernie’s performance is evaluated based on the strategy we jointly established and his ability to execute that strategy. When we purchased the Wizards, I felt it was necessary to revamp and change the direction of the team; Ernie has led that charge and embraced our new philosophy.”

Grunfeld admitted that the Wizards are in “year two of a three-year rebuild” but expressed his enthusiasm with the direction of the Wizards (18-46), who are assured another high lottery pick because they have the second-worst record in the NBA. They have also won four in a row for the first time since the team made its last playoff appearance in 2007-08 — and six of their past eight games overall— as they prepare to take on the Cleveland Cavaliers on Wednesday at Quicken Loans Arena.

“We still have a lot of work ahead of us,” Grunfeld said, “but I think we can really see some progress. Our young players are developing, we’ve become much more competitive, we’ve added some veteran players that have really helped us along the way, and I think we have a bright future.”

The Wizards lucked into drafting John Wall with the No. 1 overall pick, but Grunfeld has made some shrewd trades, purging Arenas’s undesirable contract and acquiring more first-round picks. He traded for Kirk Hinrich in a salary-dump deal with Chicago that also yielded the draft rights to Kevin Seraphin and later swapped Hinrich with Atlanta to get Jordan Crawford and the draft rights to Chris Singleton.

Seraphin, Crawford and Singleton have started every game this month. The Hinrich deal to Atlanta also came with great savings, because Mike Bibby gave back his entire $6.2 million salary this season to go elsewhere.

At the trade deadline in March, Grunfeld shipped out McGee and Young, two talented but immature players, to bring back veteran Brazilian big man Nene. The Wizards have gone 5-4 in games that Nene has played and haven’t lost any of those games by more than four points. Nene also comes with a hefty price tag, because he is owed $52 million over the next four years, and Grunfeld compared his addition to adding a free agent.

“Obviously, he makes a difference out there,” Grunfeld said. “He knows how to play the game. He’s a very intelligent player. He’s savvy. He’s one of those players that commands respect from the opposition as well as his teammates.”

Originally hired by the late Abe Pollin in June 2003, Grunfeld has compiled a 282-438 record with the organization. He brought Arenas to town in free agency, then acquired Antawn Jamison and Caron Butler to establish the core of a team that made four consecutive playoff appearances. But the team has undergone a steep decline, failing to win more than 26 games in any of the past four seasons, posting an 86-224 record over that span.

The team is also on its fourth coach under Grunfeld, with Randy Wittman going 16-31 since replacing Flip Saunders in late January. Grunfeld said Wittman has “done a very nice job” but will be evaluated after the season.

Grunfeld said his greatest regret since coming to Washington was, “We didn’t win a championship.” But he added that he didn’t spend too much time dwelling on his contract situation this season.

“I’m really more concerned about what I think and what my job is at hand,” he said. “And I think we’ve done some good things here over the years. . . . I think if you really look at it, realistically, and see where we are and see that the assets that we’ve accumulated and how we’ve positioned ourselves, I think we’re in a very nice spot to be competitive here for years to come.”