The team said Friday that the slugger exercised his $20 million contract option for 2010. His agent, Scott Boras, informed general manager Ned Colletti of the decision, which Ramirez had until this month to make.
He could have exercised an out clause in the two-year, $45 million deal he signed in March.
Ramirez hit .290 with 19 home runs and 63 RBIs in 104 regular-season games. He missed 50 games while suspended for violating baseball's drug policy.
In the NL division series against St. Louis, Ramirez batted .308 with no homers and two RBIs. Against Philadelphia in the NL championship series, he hit .263 with one homer and two RBIs.
Ramirez was traded to the Dodgers from Boston in July 2008.