Duff, who will turn 34 next month, has agreed to extend his stay at Craven Cottage until the summer of 2014.
Damien Duff: "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.
"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."