The 37-year-old has been rewarded for his consistency throughout last season’s stint in the Premier League.
Duff moved to Burnley from Cheltenham in 2004 and the Irishman will be rewarded with a testimonial at Turf Moor next month.
In a statement the club said: “Burnley Football Club is delighted to announce that Michael Duff has agreed a new one-year deal at Turf Moor.
“Duff, who will now enter a 12th season with the Clarets, returned to pre-season yesterday for the first session on grass and later penned the deal.
“The 37-year-old defender made 21 Barclays Premier League appearances last season in his testimonial year and impressed once again alongside skipper Jason Shackell at the heart of a defence that kept 10 clean sheets.
“Belfast-born Duff moved to joint 15th in the club’s all-time appearance makers in the 2014/15 season having reached 358 for the club and equalled Derek Scott’s record.
“He has proved to be a fantastic servant for the football club after joining from Cheltenham Town for a mere £30,000 in 2004 and his testimonial match will take place on Saturday, August 1 at Turf Moor with Bradford City the opponents.”