The Paraguay international's previous deal was due to expire at the end of next season, but he has now agreed to a two-year extension, ending speculation of a transfer away from the club.
The 29-year-old attacker moved to Estadio Da Luz from Newell's Old Boys in the summer of 2007, and is delighted to have prolonged his stay.
"This renewal means a lot to me. The people at Benfica have put a lot of faith in me, especially club president Luis Filipe Vieira," Cardozo told the club's official website. "This is very important to me. I want to continue doing my utmost for Benfica and don't want to let anybody down."
Cardozo has netted 13 goals in 12 league appearances for his club so far this season.