The 32-year-old joined Southend on a free transfer from Reading last summer, and the former England Under-21 international made 34 League One appearances for the Shrimpers last season.
It had been claimed that the defender could look to move on this summer after Southend's failure to make the Championship, but Ferdinand has signed a new deal at Roots Hall until June 2019.
"It's great. Within a week of the season finishing we started talking about the potential of a new deal and I'm glad that we're here now, I've put pen to paper and can concentrate on the next two seasons ahead," Ferdinand told Southend's official website.
"I had a fantastic time here last season. As I've said before, when the gaffer asked me to sign over a year ago, it was because of him that I joined Southend.
"The feeling I got off of him was one of reassurance, one of confidence and a real football man. He showed that to me throughout the season so I was keen to get the deal done to work with him for another couple of years.
"I spoke with the chairman last week and met with him again today. We are all singing from the same hymn sheet and excited by the challenges to take this club into the Championship."