Blalock has played just 123 games the last two seasons. The two-time All-Star missed 108 days in 2008 after two long stints on the disabled list.
A career third baseman, he made a midseason switch to first base this year. Blalock finished the season batting .287 with 12 home runs and 38 RBIs in 65 games. In September, he batted .337 with eight home runs and 23 RBIs in 24 games.
"Hank really swung the bat well at the end of the year, and we look forward to him continuing to make an impact for us in 2009," Rangers general manager Jon Daniels said, according to MLB.com. "I give him a lot of credit for embracing a position change mid-year, and doing whatever's necessary to help the team."
The 27-year-old Blalock has been with the Rangers for seven seasons, second only to Michael Young among current players. He was an All-Star in 2003 and 2004.
Information from The Associated Press was used in this report.