The 37-year-old former Watford and West Bromwich Albion defender will spend more time working with the club's under-21 and under-18 sides.
Robinson was without a club when he came on a one-month trial in 2012.
But this new contract is his fifth for Blues as he continues to extend a career that now totals 736 appearances.
"We wanted Robbo to stay and we are delighted that he has re-signed," said Blues manager Gary Rowett.
"Gone are the days when he will be playing 50-odd games a season. We both know that. But he showed his value this season when he featured.
"I believe he he can still be influential in other areas, working with the under-21s, whilst still being available to play."
Former England Under-21 international Paul Robinson began his career with his home-town club Watford.
He first arrived in the Midlands when he was signed by Gary Megson for West Bromwich Albion in 2003.
After six years at The Hawthorns, a season-long loan move to Bolton Wanderers was made permanent in 2010.
But he was released two years later, finishing the season on loan with Leeds United, before joining Blues as a free agent in September 2012.
He has now made 145 appearances for Birmingham, scoring four times, three of them this season in the same eight-game hot streak, having previously gone almost two years without a goal.
Birmingham City club captain Paul Robinson has signed a new one-year player-coach contract with the Championship club.