The element 'extension' is used to specify a complex type extension derivation.

You put it in the 'complexContent' element:

<xs:complexType name="Teacher">
   <xs:complexContent>
      <xs:extension base="my:PersonInfo">
         <!-- the new elements (appended) go here -->
         <xs:element name="students">
            <xs:complexType>
               <xs:sequence>
               <xs:element name="student" type="my:Student" maxOccurs="unbounded"/>
               </xs:sequence>
            </xs:complexType>
         </xs:element>
      </xs:extension>
   </xs:complexContent>
</xs:complexType>

That derivation added an element 'students' to the end of the children of 'PersonInfo'.

Notice how the same rules for in-lining and referring to types apply.