The new deal will keep the goalkeeper at the club until 2013.
“Diego Benaglio is an important foundation of our team. We are delighted to have been able to secure the long-term services of another important team member,” head coach Armin Veh said on the club’s official website.
“I feel very happy with Wolfsburg and am looking forward to continuing my work here. We have an ambitious team and I would like to play my part in establishing Wolfsburg at the top of the Bundesliga and developing internationally.”