The move, which was reportedly in the works for about a month, was simply a formality. The fifth-year option is worth about $10 million for the 2015 season.
Peterson signed a four-year contract when he was drafted fifth overall in 2011. Keeping Peterson for another season gives the Cardinals ample time to work out a long-term deal with the three-time Pro Bowler.
Peterson, who turns 24 in July, has been an All-Pro in two of his three seasons in the NFL -- once as a punt returner and once as a cornerback.
Peterson is scheduled to earn $2.88 million in 2014.
Last season, he recorded 40 tackles, three interceptions and two fumble recoveries while establishing himself as one of the top cover corners in the league.
As a punt returner, however, Peterson struggled, returning just 33 kicks for 198 yards and going without a touchdown for the second straight year.