Stegeman was appointed as Jan de Jonge's successor in August on an initial temporary basis when the latter was sacked following a dismal start to the Eredivisie campaign.
Under De Jonge, Heracles lost their first four league games, with Stegeman's first match in charge resulting in a narrow 2-1 defeat to champions Ajax last Saturday.
While Stegeman's side remain bottom - four points adrift of Go Ahead Eagles, Dordrecht and Vitesse above them - general manager Nico-Jan Hoogma feels the decision will prove to be the correct one for the club.
"We choose John with conviction and therefore have every confidence in this solution," Hoogma told the club's official website.
"John knows the club and its culture, is a football person and a hard worker.
"We are still monitoring the option to possibly add an additional assistant coach to the staff."
Heracles host a Twente side unbeaten in the league on Sunday as Stegeman seeks to get his side's campaign up and running.