Muller captained the Ulster team on a number of occasions this season while Rory Best was absent through injury or away on international duty.
He has clocked up an impressive 2027 minutes on the pitch for Ulster during the 2010/11 season - starting all but four of the province's competitive games - and quickly become a firm favourite with the fans at Ravenhill.
Winner of the Heineken Ulster Rugby Personality of the Year honour at last week's gala awards ceremony, he was lauded for the contribution he has made to the province both on and off the pitch.
Muller has been credited with inspiring much of the change at Ulster this season, with the team reaching the Heineken Cup quarter-final stages for the first time since 1999 as well as the Magners League play-offs.
"The people of Northern Ireland have been great to me and my family, so staying an extra year wasn't a decision we had to think about for long.
"It was a successful season for us and we are taking steps in the right direction, but the players and the coaching staff need to keep working hard for next season.
"Teams are judged on silverware and we have nothing to show for our season. We are determined to win something for the trophy cabinet at Ravenhill next season and to do that we must keep improving."
Muller added: "I've been in the fantastic position of having a leadership role within the squad. I hope I can keep trying to help the younger players and they keep improving.
"The more games they play and the more experience they get will be of benefit to themselves and Ulster. If, in a couple of years I leave Ulster and have managed to help a few players develop, I will be delighted with that."