The 32-year-old, part of the squad relegated from the Premier League last season, has activated a 12-month extension built into the contract he signed on arrival from Wolves in 2013.
He told the club website: “I’m pleased to have taken up my year’s option. I’m looking forward to the challenge ahead with this group of players.
“Hopefully we can bounce back from last year’s disappointments and give the fans something positive to shout about.”
Rangers’ director of football Les Ferdinand said: “Karl showed last season, in a difficult campaign for us, what he can bring to the side, so we’re pleased he’s taken his option up.
“Experienced players are going to be key for us in the Championship this season, especially with the younger signings we’ve already signed this summer.
“Karl’s heart, energy, desire and quality will be really important for us this coming season.”