The 34-year-old's deal also includes provision for a further year's extension which will kick once he reaches a set number of appearances.
Teale was in-and-out of the side at the start of the season but won his place back and went on to play a key role in January's League Cup success.
Speaking a few days before his deal was confirmed, the 2011 free transfer said: "I hoped things would change and fortunately enough they did and now I am enjoying it.
"No matter what age you are, after training in the week, you want to play on the Saturday. I didn't have that for a wee while and it was very frustrating. So to get back in the side was great.
"I'm happy to be getting a new deal and hopefully with the option, it will be for two years."