The England left-back, whose contract at Stamford Bridge expires at the end of the season, had been linked with moves away to Real Madrid and Paris St Germain.
Sky Sports had revealed that the 32-year-old was set to sign a new one-year deal, and Benitez confirmed that only the formalities now need to be completed.
"I am really pleased, the paperwork has to be done but the agreement is there," he said.
Cole, who joined the Blues in 2006 from Arsenal, was part of the team that beat Bayern Munich to win last year's UEFA Champions League final, and he has also won one Premier League title, four FA Cups and a League Cup with Chelsea.
Team-mate Frank Lampard is also out of contract at the end of this campaign and looks set to depart the West London club.
Benitez said the 34-year-old midfielder is "doing a great job... he is playing well," but stressed "it is not my decision" to extend his stay at the club.