Kimi Raikkonen says continuing with Lotus for a second season was an obvious decision for him to make.
The 33-year-old Finn is currently third in the drivers' standings and is still in mathematical contention with Sebastian Vettel and Fernando Alonso for the championship.
And although Raikkonen has yet to win a grand prix so far in 2012, he has finished on the podium six times, scored in every race bar one and has completed every racing lap this season.
"I think my return to Formula 1 has gone pretty well and the team has done a very good job all year so far," said Raikkonen.
"To be honest, I didn't expect to be fighting for the drivers' championship this season when you look at where the team was in 2011, so it has been great to be on the podium so many times and to score points on a regular basis.
"I feel very comfortable with Lotus and we share the same philosophy of racing.
"Continuing with the team was an obvious choice for me and I'm looking forward to making another step forward together next year."
Lotus team principal Eric Boullier reckoned that Raikkonen deserved credit for Lotus's fourth position in the constructors' championship as well as the Finn's position in the drivers' standings.
"Kimi has made an exceptional comeback to Formula 1," he said. "From the first time he sat in the car this year it was clear he had lost none of his pace or technical feedback and we have been rewarded by a focused and motivated driver all season.
"For Lotus to be fighting for such strong championship positions this year is in no small part attributed to Kimi's talent and experience of racing.
"It was a natural conclusion for us to confirm that we will be harnessing his abilities for next season."