Stan signs on
The Australian international`s contract was due to expire in the summer, though The Blues did have a one-year option on the former West Ham ace.
City offered the 30-year-old a deal last week, and despite reported interest from Italian Serie B outfit Ancona the Aussie has opted to remain at St Andrews.
The winger, who was quick to praise manager Steve Bruce for his contribution, believes the club can progress even further next season.
"The manager and I have both agreed that it has probably been my best season at the club," said Lazaridis. "The manager also deserves a lot of credit for our success.
"I have been able to perform consistently well, week after week, and have helped to set up several goals as well as grabbing a couple myself.
"Steve's man-management has been excellent and he has been tremendous to play for.
"It is a good club to be at, particularly at the current time, and we will now be looking to push on and get stronger next season."
Bruce revealed the player's performances this term gave the club little option but to retain his services once his deal expired.
"We did have a year's option but we decided we wanted to add another year on top of that," said Bruce.
"It's in recognition of the way Stan has performed for us this season and the way he has conducted himself."