The midfielder, who joined the Gunners in 2011 and was made captain three years later, made only 11 starts across all competitions last season as a result of injury problems.
He was at risk of leaving the Emirates Stadium as his deal expired this summer but his boss has moved to tie him down for another year, though he warns that he "faces a battle" to regain and hold his place in the team.
"He will stay with us for one more year because he has extended his contract," Wenger told the club's official website.
"He's one of the leaders in the club because he's the captain of the team. I expect him to contribute much more than last season but he also faces a battle.
"With the number of games we have ahead, we could use his experience, his desire and his quality as it will be vital for next season."
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