The 36-year-old had been tipped to leave the Blues this summer, but manager Alex McLeish believes the veteran can still make an impact in the Premier League.
“There can be no doubting Kev’s goalscoring prowess, which is something he’s had throughout his career,” McLeish told the club’s official website.
“Some people may ask why we’ve retained the services of a 36-year-old but let me tell you he’s still extremely fit, in fact his Prozone figures are excellent – his Body Fat Index is one of the lowest in the Premier League.
“Of course as any player gets older the legs go a little bit but the reason Kev has still got it is because he plays with his head – he’s got an instinct that means that more often than not he’s in the right place at the right time. He’s a natural born finisher.
“He’s also great to have around the dressing room because he’s a tremendous character. He’s bought into the idea of being an impact player for us if the team is under pressure.
“During the first half of last season he was naturally a bit frustrated with not starting games but I had a good chat with him in January and explained what we were looking to do and that there was no better man than him inside the box.
“I saw an extra spark from him in training after that and I know how much he enjoys being a Blues player so the contract extension is good news all round.”
