Wolfe was set to become a free agent after this season, a year in which he recorded 5.5 sacks and 50 total tackles. According to NFL Network's Ian Rapoport, Wolfe will earn $36.7 million over the four years of his extension. He'll see a guaranteed $17.5 million and will make an average of $9.175 million per year.
Team vice president and general manager John Elway was happy to keep Wolfe in Denver:
"Derek Wolfe's developed into one of the top DLs in the NFL," Elway tweeted. "And we're excited with his 4-year extension. Proud of him!!"
It's good news for the 25-year-old Wolfe, who is preparing along with his defense for a weakened Pittsburgh Steelers in the AFC divisional round on Sunday.
Wolfe is part of a Broncos defense that ranks first in the NFL in total yards and passing yards allowed and is third in rushing defense. Denver has also recorded more sacks than any other team in the league.
Of Denver's 12 leading tacklers, eight of them are 26 years old or younger, including Wolfe.
He earned AFC Defensive Player of the Week honors against the Green Bay Packers in Week 8 with seven total tackles. He recorded all of his sacks in the last seven games of the season. It was a solid finish to a 2015 regular season that began with uncertainty after he was suspended for the first four games of the year.
Possessing speed and aggression coming off the edge, Wolfe is a tough man to stop when he's on his game. He's able to penetrate the opposing offensive line and find his way into the backfield, which is a huge help to the interior defense against the running game.
As he enters the prime of his career, he couldn't be in a better possible place, as the Broncos defense looks poised to be a stellar unit for the foreseeable future.
Stats courtesy of Pro-Football-Reference.com.