Rufer, 26, will play on into his second decade with the Phoenix with the deal, that takes him to 2026.
"I felt like this was where I was going to improve and where I am going to be most happy," he said.
"That's a big thing for me, to be close to my family. I'm over the moon."
The nephew of New Zealand great Wynton Rufer made his debut for the Phoenix back in 2014, but has made just 115 starts in a career blighted by injury and form dips.
He was appointed club captain in late 2021, but suffered an anterior cruciate ligament rupture in March last year that kept him out of football for nine months.
Back playing again, Rufer - who was born in Geneva and holds a Swiss passport - said it was "an easy thing" to sign on, and he was open to staying beyond the deal.
"It's something I am definitely open to. I would love to play overseas as well," he said.
"If I end up playing here the rest of my career then I'd be extremely happy."
Rufer's re-signing is important for Wellington, who will lose fellow defensive midfielders Steven Ugarkovic and Clayton Lewis at the end of the season.
Wellington football director Shaun Gill said Rufer "extols all the values we have at the club" and was a "critical piece of retention".
The club have 13 players re-signed for next season and are in talks to tie down right-back Callan Elliot to a new deal.
Gill said others remain "in the mix" for new deals, along with coach Ufuk Talay, who is out of contract after his fourth season at Wellington and has spoken of his ambition to work overseas.
"We'll wait to see what happens on the coaching front and from there, finish things off," Gill said of next year's squad.
"We're holding fire on a few things to make sure, if it's Ufy, we get the players he wants and if it's someone else we get the players that they want."
