The 31-year-old joined the Rabbitohs in 2008 after spending the previous decade with Penrith, for whom he appeared 177 times.
Wesser says he is delighted to be staying at South Sydney.
“I’m really happy to be a rabbit again. I think we have a great team here and I want to be part of that,” Wesser said.
“There are a lot of good young players coming through at the Club, and hopefully we can perform strongly over the next three weeks and qualify for the finals this year, and then lay a good platform for another big year in 2011.”
Rabbitohs CEO Shane Richardson said he is looking forward to seeing Wesser perform in 2011.
He added: “Rhys is the complete professional and we’re very pleased that he will be with us for a further season.”
“Rhys has been getting back to some of his best form after recovering from a knee injury which kept him out for most of last season, and he will be a mentor for some of our developing young players that are coming through the grades.
“It’s great to have Rhys here for next season and we look forward to seeing some of his best football being played in the red and green this year and next.”