The former Australia international joined Jose Mourinho's side on a free transfer from Fulham 12 months ago, and served as back-up to Petr Cech last term.
Schwarzer made 12 appearances in all competitions, and covered for the Czech Republic keeper when a shoulder injury prematurely ended his season in April.
Thibaut Courtois is set to return to Chelsea from a third loan spell at Atletico Madrid, making competition between the posts even more fierce.
But the veteran keeper will enjoy a further year in west London, lending experience from over 500 Premier League appearances to Mourinho's talented squad.
Schwarzer's new deal comes as another experienced keeper, Henrique Hilario, has been released from his contract.
The 38-year-old Portuguese made 39 appearances for Chelsea in an eight-year spell in England.
‘Maybe I’ll be signed by Wrexham, who knows? English football would suit me – if an offer came, I wouldn’t think twice, I’d go immediately’ Euro 2024 cult hero reveals his UK dream
‘Managing Leeds? It was an option that appeared, but it wasn’t the right timing. I decided it wasn’t a good idea to leave the club I was at mid-season’: Premier League boss admits to turning down opportunity to replace Jesse Marsch in 2023
