The former Wales international, 34, joined Forest in 2013, initially on loan from Sunderland, before signing permanently the following summer.
Vaughan played 33 times this season as Mark Warburton's side avoided relegation on the final day with a 3-0 win over Ipswich.
He has previously played for Crewe, Real Sociedad and Blackpool.
Nottingham Forest midfielder David Vaughan has signed a new one-year deal with the Championship club.