The 25-year-old German has won the last three championships and is leading the current one by a hefty 36 points after seven races and his latest display of dominance at the weekend in Canada.
The sport's youngest world champion, who has been linked to Ferrari over the past few years, joined the team in 2009 and has won 29 races, appearing on the podium 51 times with 39 pole positions.
Vettel's decision to extend by only a year could be significant as it allows him to hedge his bets until other coveted seats might be available.
Double world champion Fernando Alonso has a contract with Ferrari that runs until the end of 2016 - by which time Vettel will be still only 29 years-old - while Britain's Lewis Hamilton, the 2008 champion, signed a three-year deal with resurgent Mercedes last season.
The engine rules are changing significantly next year, with a new turbocharged V6 unit with energy recovery systems being introduced, and there is no certainty that the current pecking order will remain the same.
Red Bull's design genius Adrian Newey, the brains behind a string of title-winning cars, could also grow restless and decide to explore other interests - particularly if engines become the dominant factor.
With 2009 world champion Jenson Button sure to stay at struggling McLaren, attention is likely to focus now on 2007 champion Kimi Raikkonen - out of contract with Lotus at the end of this season - and Brazilian Felipe Massa's future at Ferrari.
Media speculation has linked Raikkonen to Red Bull as a replacement for Australian Mark Webber, who will also be out of contract this year.
Massa's situation is constantly under assessment, with Germany's Nico Hulkenberg seen as a leading contender following his move from Force India to Ferrari-powered Sauber.
Ferrari team principal Stefano Domenicali ruled out in January a "dream team pairing" of Vettel and Alonso - for the time being - amid speculation that the German had a pre-contract to join in 2014.
However, Ferrari president Luca Di Montezemolo has called Vettel "a potential Ferrari driver for the future".
Red Bull will want to hang on to their champion for as long as they can, convinced that he will only get better over the next few years.
"He is continuing to get stronger," team principal Christian Horner said in Canada at the weekend.
"He is a very focused and determined young man, and has already achieved a huge amount in his career. But the impressive thing about him is how much desire he has to continue to improve himself. He obviously wants to achieve as much as he can."