The 37-year-old striker has scored 25 goals in all competitions since joining the club before the start of this season including 20 in Miami's record-breaking regular season campaign.
After winning the Supporters' Shield for the best record in the regular season, with a new points tally record, Miami were eliminated from the playoffs in the first round by Atlanta United.
Since then Argentina head coach Gerardo Martino has left the club with his compatriot and Suarez's former team-mate at Barca, Mascherano appointed on Tuesday.
"I'm very happy, very excited to continue for another year and to be able to enjoy being here with this fan base, which for us is like family. We feel very, very connected with them, and hopefully, next year, we can bring them even more joy," said Suarez.
Miami's president of football operations Raul Sanllehi said Suarez had shown he remains an elite level forward but was also a key component in the dressing room.
"Luis was not only our leading scorer this season, but also a leader for the group. His impact cannot be understated," he said.
Suarez announced in September he was retiring from international duty with the Uruguay national team after scoring 69 goals in 143 games.
The forward played in Europe for Ajax, Liverpool and Atletico Madrid and had a season in Brazil with Gremio before joining Miami.
