The Germany striker has decided to stick with the Serie A side rather than move away this summer and could even stay until 2016
The Germany international, 35, has been at the Stadio Olimpico since 2011 when he joined from Bayern Munich, but had been linked with a move away in the upcoming transfer window.
However, Klose signed an extension on Friday which includes an option for Lazio to add an extra 12 months on to the contract next summer.
"I'm very happy to stay here," Klose told the club's website upon the announcement of the contract renewal. "I have an important role to play in this club's project."
The forward has only played three times for the Biancocelesti since the start of March due to back trouble and muscular issues, though he has featured 26 times for the club this season.
Klose, who is expected to go to the World Cup this summer if fit, has scored seven goals and bagged five assists in 22 Serie A appearances in 2013-14 so far.