The Mali international will remain at Craven Cottage after initially joining the Cottagers in January 2012 where he went on to make 11 appearances during the 2011/12 campaign
The former Lyon, Real Madrid and Monaco player joined the club in January 2012 until the end of the campaign.
An option to extend the deal into 2013 has been accepted allowing Diarra to add to the 11 appearances he has made for Fulham thus far.
The 30-year-old has made an immediate impact since joining the Cottagers, helping them secure an impressive ninth-place finish in the last campaign.
He scored his first goal in the Premier League in a 3-0 victory against Bolton Wanderers.
His illustrous record includes four Ligue 1 titles with Lyon and two La Liga titles at Real Madrid.