Crocker, 32, arrived at the club in 2009 after a move to Super League club Hull broke down, and helped lead the Rabbitohs to the Preliminary Final in 2012.
He said: “I’m really happy about going around for another season and it’s an exciting time to be part of South Sydney.
“We’re working on building our own history at this club, and I really want to be part of it.”
A veteran of five NRL Grand Finals, including wins with Sydney in 2002 and Melbourne in 2007, Crocker has played 201 games in the competition, 65 of those for Souths.
Head Coach Michael Maguire said: “Michael’s leadership qualities really shone through in 2012 as part of our five-man captaincy group.
“He is, and will be, an integral part of this group growing and taking the next steps forward.”