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The former Super Eagles captain joined the Championship side last summer, after ending his stay at Turkish Super Lig side Trabzonspor on a mutual agreement.
Mikel Obi delivered impressive performances during his debut season, featuring in 41 appearances across all competitions.
His effort was, however, not enough to help Stoke gain promotion to the Premier League as they ended the 2020-21 season in 14th spot.
Stoke, satisfied with the midfielder’s showings, have extended his stay for a year as they hope to make another attempt to gain promotion next term.
“Contract extensions have been activated to retain the services of defender James Chester and midfielder John Obi Mikel,” read a statement from the club website.
