The new contract will keep the 31-year-old with the Division Two champions until the end of the 2018 season, having been with the side since Academy level.
Cook had a busy summer with England, playing seven Tests, but also featured seven times for Essex with an average of 91.86 to help them secure promotion.
"It was an easy decision to sign with the club for another year," Cook told the club's website. "Although I am away with England a lot, this club means a lot to me and I am grateful for the opportunity they gave me as a youngster.
"I love coming back to the club when I can and contributing to a title winning season meant a great deal."
Head coach Chris Silverwood added: "Although Cooky is away with England a lot of the time it is still brilliant to have him back when he is available. He offers the squad a wealth of knowledge and also a weight of runs.
"Hopefully at the start of next summer he can be about a bit more and contribute to stabilising our position in the County Championship Division One."
Cook will fly out with the rest of the England squad to Bangladesh this week, before moving on to India for a five-Test series before Christmas.