The 34-year-old’s existing deal was set to expire at the end of this season and the new deal is in line with Chelsea’s policy of offering those over the age of 30 only one-year deals.
After coming through the academy ranks, the Blues club captain has made 661 appearances since his debut in 1998, scoring a club record 63 goals for a defender.
Capital One Cup final victory over Tottenham at the beginning of the month brought Terry his 13th major honour.
He has won a Champions League, Europa League, three Premier League titles, five FA Cups and three League Cups in a distinguished career.
Terry played 78 times for England, scoring six goals, in a nine-year international career and he said: “I’m delighted to have signed an extension to my contract with Chelsea.
“After adding another major trophy to my collection this month I hope myself, the players and manager can continue to bring success to our club.
“Playing for this great club makes me so proud. And as always I would like to thank the fans who have continually supported me.”
Jose Mourinho said: “This new contract is not to say “thank you very much”; it is because John continues to perform.
“He is a top defender. I am happy that he completely deserves this new contract after a season where he has already played 40 matches.”
Chelsea entered the international break with a six-point advantage over nearest rivals Manchester City, with a game in-hand, in the race for the 2014/15 Premier League title.