Wright-Phillips, 32, is the reigning MLS Golden Boot winner after scoring 24 goals in 2016. The English striker tops all MLS players with 69 regular season goals since 2014, his first full season in the league.
"His on-field accomplishments at this club speak for themselves, but that success comes from his dedication and work ethic day in and day out," Red Bulls sporting director Denis Hamlett said in a news release. "His character and leadership make him an important part of our group and we look forward to his continued success with the Red Bulls."
Wright-Phillips signed with New York in July 2013 and tied the MLS single-season record with 27 goals in 2014. He is the only player in MLS history to have multiple 20-goal campaigns.
The Manchester City product previously signed a designated player deal in December 2014, but his status as a DP was removed in 2016 to accommodate other players. He now again occupies one of the Red Bulls' three big-money roster slots, alongside Sacha Kljestan and Gonzalo Veron.
"I am very proud of what has been accomplished in my time here," Wright-Phillips said, "but my sole focus is on trying to win MLS Cup."