Head coach George Karl maintains that bringing Carter back was a key task that needed to be done for next season.
Nuggets executive Mark Warkentien said: "AC's loyalty to (owner) Stan Kroenke, George Karl, and Denver is exemplary; rarely seen in professional athletics today."
Not exactly an All-Star, Carter played the role of Chauncey Billups' backup last season well in averaging 4.7 assists in 22.9 minutes per game.
In 150 games over the previous three seasons with the Nuggets, he's averaged 6.4 points and 5.1 rebounds.
The Nuggets will look to stay in contention after a successful season last year in which they reached the Conference Finals, only to be dispatched in six games by the eventual champion L.A. Lakers.