ARLINGTON, Texas (AP) - General manager Jon Daniels' immediate future with the Texas Rangers was settled Tuesday with a one-year contract extension.

Now Daniels has more time to figure out how to improve baseball's worst team.

Rangers owner Tom Hicks gave the 29-year-old Daniels an extension through the 2009 season despite a 26-43 start that left Texas with the worst record in the major leagues. While disappointed with the record, Hicks is confident in baseball's youngest GM.

"Jon's got some hard decisions to make as we go into the next month to the trading deadline on how we improve the team," Hicks said. "I wanted to make sure he felt properly empowered to make the changes he felt fit to make."

Daniels is only halfway through his second season since becoming the youngest GM in major league history when he replaced John Hart in October 2005. The Rangers went 80-82 last season, then fired Buck Showalter and replaced him with rookie manager Ron Washington.

Since taking over a team that last went to the playoffs in 1999 and has never won a postseason series, Daniels has put an emphasis on the organization's scouting and development, including broadening the organization's presence in Latin America. Last winter, Daniels conducted the Rangers' first organization-wide meeting of coaches, scouts and administrators in several years.

"What we tried to do was win and develop at the same time. It's the hardest thing to do in professional sports, try to execute two plans at once," Daniels said. "There are a lot of good things going on that I'm proud of that don't get as much publicity, and for good reason."

With the Rangers stuck in last place and the trading deadline six weeks away, Daniels faces plenty of big decisions with other teams already showing interest in Texas players.

Relievers Eric Gagne and Akinori Otsuka are signed only through this season, as is 40-year-old center fielder Kenny Lofton. Teams will also inquire about first baseman Mark Teixeira, who is eligible for salary arbitration after this season and can become a free agent after 2008.

"Barring a significant turnaround, we'll be in the position of listening to other club's interest in our guys. It's not the position I want to be in, but it's the position we're in," Daniels said. "What we're trying to do is evaluate what gives us the best opportunity to acquire the best talent going forward."

Hicks and Daniels have both said they would like to see Teixeira, a switch-hitting slugger who was the Rangers' fifth overall pick in 2001, remain with the team throughout his career.

"We recognize the reality of the system and how it works that it may or may not be possible for Tex to stay with our club long term," Hicks said. "If somebody makes an offer that could improve our team longer term, we have to make a decision whether to gamble. It's a situation Jon faces this season, this offseason and next year" until Teixeira's contract is done.

The extension for Daniels doesn't immediately affect Washington, whose two-year contract is through 2008 and includes an option for two more seasons. Hicks referred questions about the manager to Daniels.

Daniels said Washington, a coach for Oakland the past 11 seasons, is "an integral part" of the organization. Daniels said any discussions concerning Washington's contract "will probably be after the season."

Daniels' extension comes two weeks after the amateur draft in which the Rangers had six of the first 80 picks and selected a pair of standout high school pitchers in the first round.

"Our goal is to be one of the premier development organizations in the game. We got a ways to go, but we've made progress," Daniels said.

"It's all about confidence and credibility," Hicks said. "Jon has the ability and the skills and I think he's going to get better every year. One thing this organization needs is stability. There are a lot of things Jon started two years ago that are going to pay dividends."

This year, the Rangers have been hampered by a starting rotation that has a 6.80 ERA with top two pitchers Kevin Millwood and Vicente Padilla struggling.

Millwood (3-6, 7.62) struck out a season-high 10 Sunday in Cincinnati, but that was his first win in eight starts since April _ a stretch that has included two stints on the disabled list. Padilla, given a new $33.75 million, three-year contract after winning 15 games last season in Texas, is 3-8 with a 6.57 ERA.