The 33-year-old cast speculation on his future with the Black Caps after deciding to skip August???s limited-overs series in South Africa and Zimbabwe, following the thrilling recent tour of England.
After drawing the two-match Test series with England, the Kiwis lost 3-2 in the one-day series and suffered again in the one-off T20 showdown at Old Trafford on Tuesday.
The new contract will see McCullum lead the side during the home and away series against neighbours Australia, where the batsman is set to play in his 100th consecutive test, as well as the 2016 World Twenty20 in India.
McCullum, currently representing Birmingham Bears in the NatWest T20 Blast, said: ???It???s a critical time for the side. We???ve enjoyed a pretty good past 18 months, but there are some serious challenges ahead and we need to keep making progress.
???This is a young, emerging team with some very big series looming on the horizon ??? and it???s really exciting to be involved.???
His enthusiasm was echoed by New Zealand Cricket chief executive David White, who was delighted to have secured the future of his country???s star attraction.
“This is enormous news for NZC, the Black Caps, and everyone who supports the game in New Zealand,” he said.
“Under Brendon, the Black Caps have enjoyed unprecedented success over the past 18 months and to have him remaining at the helm for another year is extremely good news.
“Brendon has proved himself to be an exceptional player and leader, and the side will be much stronger for his presence.”