Yao will make upwards of $17 million next season, when the Rockets hope to return to the playoffs.
Yao told KRIV-TV of his decision, saying:
"My decision is very clear, I am going to stay with the Rockets ... Why? Because everything we've done in the past I feel very comfortable with and also I believe our GM (Daryl Morey) will bring us more talent for helping us build a championship team."
Morey also chimed in via Twitter, saying:
"We will work hard every day to live up to the confidence Yao has shown in us. Next season can be special w/him returning"