Duff, who will turn 34 next month, has agreed to extend his stay at Craven Cottage until the summer of 2014.
The veteran's signature comes as welcome news for Fulham, who have 11 players who are due to come out of contract at the end of the season.
Duff has played an important role this term, scoring three goals in 22 league appearances to earn his new deal.
"I've loved my time at Fulham since I joined the club more than three years ago, so I'm really happy that I am going to stay here for a further year," Duff told the club's official website.
"With 12 matches remaining this season, a top-10 finish is still possible and would represent another good season for the club as we aim to play in the Barclays Premier League for a 13th consecutive campaign.
"I will always give 100 per cent for the chairman and the club, and I look forward to another season playing at Craven Cottage, which really is a special ground."