Porter, 28 netted 5 league goals last season for the Blades as well as scoring the elusive goal which guided them to Wembley, only to lose in the final (on penalties) to Huddersfield Town.
He told BBC Radio Sheffield: "I'm made up and can't wait to get back into the swing of things. It's dragged on a little bit but I'm glad to get it sorted." He added: "I didn't speak to any other clubs personally and I told my agent that I was happy here. It was a slightly frustrating first season but I'm hoping to kick on this year."
Meanwhile, winger Jordan Chappell, 20, has agreed a new one-year deal.