The 29-year-old, who was due to be out of contract this summer, has put pen to paper on a one-year deal.
Thompson, who started his professional career at Dale after coming through the youth ranks, re-joined the club in August 2016 after a spell away.
After making over 150 appearances for Rochdale, the long-serving midfielder left the club to join Tranmere Rovers for an undisclosed fee in the summer of 2012. During his time at Prenton Park, Thompson returned to the Crown Oil Arena on a month-long loan. He then went on to sign for Bury and Carlisle United before returning to join up with Keith Hill’s side.
Last season, Thompson made 11 appearances for the club, with his first of the campaign coming in December, just six months after being given the all-clear following a second battle against cancer.
He rounded of a remarkable season in fairytale style, scoring the goal that kept Rochdale in League One.
“I’m over the moon to have signed a new deal”, Thompson told the Rochdale website.
“I remember the Gaffer saying to me at the end of the season, ‘you’ve climbed to the mountain top, so I bet you want to enjoy the view’. And it’s like anything, you’ve got to take some time, evaluate and spend time with your family.
“I went away and I realised that I’m not done. I had opportunities to do other things, whether it be in media or in public speaking, but it’s every boy’s dream to play football, so why give it up?
“All I have ever done is football since I left school. I also feel that I’ve maybe not reached my potential yet, because I’ve always had the reigns on or being playing catch-up, so I’m excited for the future and I can’t wait to get back out there – I’m raring to go for pre-season.”