The former England international has made more than 60 appearances for Wolves during his time at Molineux and has played a key role as a member of the squad since he arrived at the start of the 2017/18 season.
Having chalked up more than 400 games during his time as a professional with clubs such as Cambridge United, Everton and Norwich City, the experienced keeper has been a vocal presence among the Wolves first-team squad in recent years.
Wolves technical director Scott Sellars said: “We are all delighted for John to have signed a new contract. To have a person of his experience and quality is great for the squad.
“But not only that, the leadership he brings off the pitch and how he is in the dressing room and in training made it really important that we got John to stay at the club.”
His penalty heroics against Cardiff City helped secure Wolves’ Premier League promotion in his first season at the club, before the arrival of Portugal number one Rui Patricio saw Ruddy move to a supporting role during the past three seasons.
Read more: Ruddy | 'I still have a lot to offer'
But the popular 34-year-old – who has kept 34 clean sheets in his 66 outings for Wolves – played his part in the club earning their place in a first FA Cup semi-final in almost 20 years.
Sellars added: “With his experience, John has also gained a lot of knowledge and he’s shared that knowledge with all the players. Watching the games behind closed doors, you’ve heard how vocal he is even when he’s not playing.
“Then when he came back into the team against Everton, he showed his quality, so it’s not just about his personality, we wanted him to stay because he’s a top-class goalkeeper. To have a goalkeeping group of the quality of Rui and John is really important.
“He’s been a focal point at Wolves ever since he came here, producing a great season to help the club earn promotion and then he’s shown all the qualities you need to be a number two keeper who pushes the number one – with the number one knowing he can’t rest.
“With a new manager and a new start, John’s now got the opportunity to push on again.”
