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Town boss Joe Royle told the club site: "Congratulations to Fabian, he has been terrific for us and has had a good season.
"He has shown he can play right across the back four and we're delighted to have him here for another year.
"It will be nice to go into the summer in a position of knowing who we will have in the squad next season, rather than the uncertainty we had last year.
"We do have the basis of a squad that will be fine for next season, but I would still like to add to that with another new arrival or two."
Royle admitted that he hasn't made any contact with Southampton about taking Ricardo Fuller on a permanent deal but hinted that talks are a real possibility. The Jamican striker spent a month on loan with Ipswich.