The 32-year-old midfielder, who still had one year left on his existing contract, has signed new deal that will run until the summer of 2012.
"Before I left on the tour it was all agreed and I signed on the dotted line," he told the club's official site, bcfc.com.
"I can now concentrate on another two years at Birmingham.
"It was kind of a dual thing: they came to me and had a chat, and I was always interested.
"I was more than happy to extend the contract by another season.
"I can now focus on trying to do the job I did last year, and do it even better."