The 33-year-old arrived at Fratton Park in January on a short-term deal, which was due to expire next month.
However, following discussions with manager Andy Awford, it has been decided that the left-back will remain on the South Coast for another season.
"The gaffer told me at the end of the season that he wanted me to stay, so I'm delighted we've been able to get things sorted," he told the club's official website. "I wanted to get this done quickly before I went on holiday, so I can come back ready for pre-season.
"To get the kind of support we do at Pompey – especially at this level – is amazing and one of the reasons why I wanted to stay. I really enjoyed my time here last season and hopefully I can also enjoy the next one."
Shorey, who has two caps for England, made 21 appearances for Pompey last term.