The deal will take Simpson into a 15th AFL season.
The 264-game veteran showed no signs of slowing down in 2016, averaging 27.1 disposals, 6.9 marks and 2.5 marks per game, playing every game for the season.
“The Club is united, and while we know we have plenty of hard work ahead of us, we have an exciting young list coming through and it’s an environment I want to be part of,” Simpson said.
“I really enjoyed this season under Brendon Bolton and the coaching panel and the body is feeling good. While I can still contribute to the playing group, I am keen to go on so I’m thankful to the Club and my manager for making this happen.”
Carlton head of football Andrew McKay said Simpson’s leadership is an invaluable part of the football club.
“Kade is such a highly respected member of our playing group and the experience he brings to the side is invaluable,” McKay said.
“Not only is he a fantastic leader and mentor for our defenders, he is just so reliable and consistent down back and we’re thrilled he’s staying on for another year.”