The much-travelled 34-year-old former West Bromwich Albion, MK Dons, Leicester City and Birmingham City winger has been rewarded for helping to keep the Brewers at second-tier level.
"When I signed, everyone said we were going to get relegated but we didn't. That's a massive achievement," he said.
"We have a great team spirit and that was what got us through."
Dyer played in all but four of Burton's 46 league games, scoring seven times, matching the tally he achieved in Leicester's Championship title-winning season in 2013-14.
Having scored on his debut in the Brewers' first Championship game against Nottingham Forest in August, he also netted in their victories over Birmingham City and Aston Villa.
"Growing up I was a Villa fan so when I scored that goal it was a nice feeling," he said. "And, when I checked, I found out that I had equalled the most goals I have scored in the Championship so overall it has been a good season."
Burton finished 20th in the Championship, avoiding relegation by just a point.
Burton Albion veteran Lloyd Dyer has signed a new one-year contract with the Championship club.