The Bafana Bafana ace committed to Chiefs on Tuesday after Crystal Palace revealed they may only offer him a deal in June following his recent trial with the Championship side.
Amakhosi general manager Bobby Motaung was delighted with 'Shabba's' decision to stay at Naturena.
"We are delighted that Tshabalala has renewed his contract after he was given time by the executive chairman (Kaizer Motaung) to ponder about his future," 'Bobsteak' told the club's official website.
"He has always been loyal to the club and his experience will be important at this stage of the season."
Tshabalala has been a stand-out performer for Chiefs since arriving from Free State Stars in 2006.