The 31-year-old Serbia defender was entering the final months of his existing deal, but will now stay on until the summer of 2017.
The new 12-month contract is in line with Chelsea's policy of offering only one-year deals to players aged 30 and over.
Ivanovic joined from Lokomotiv Moscow in January 2008 and has been a key component of many Chelsea successes, winning every major club honour
He was suspended for the 2012 Champions League final win, but scored the decisive goal in the 2013 Europa League success.
That was one of 32 goals in 341 appearances to date.
Ivanovic said on chelseafc.com: "I am very happy to stay with Chelsea for another season.
"After eight years here this is my home and there is no other place I would rather play football.
"I have enjoyed so much success since moving to the club and I am determined to help the team achieve more in the last months of this season and next year as well."
Source : PA