The Chiefs did not disclose financial terms in announcing the deal Tuesday.
The 30-year-old Okafor has 30 sacks and 183 tackles in eight NFL seasons, including the past two with the Chiefs. He joined the club as a free agent from New Orleans in March 2019, signing a three-year, $18 million contract.
Okafor made an immediate impact in helping rebuild the Kansas City defense, recording five sacks and 21 combined tackles in 10 games. A torn pectoral muscle in Week 15 forced him to finish the season on injured reserve. He missed playing in the team's victory over San Francisco in Super Bowl LIV.
The veteran signed a restructured contract in August 2020 that reduced his salary cap figure for that upcoming season by $2 million and voided the final year of his original three-year deal.
A hamstring injury limited Okafor to 11 games last season. He finished with three sacks and 16 total tackles. He contributed in a backup role during the team's playoff run, picking up five total tackles in three postseason contests, including one stop against Tampa Bay in the team's 31-9 loss in Super Bowl LV.
Okafor expects to compete for a backup role behind anticipated starters Frank Clark and Chris Jones as the team's edge rushers. Competition at defensive end also includes veteran Taco Charlton, second-year pro Mike Danna and 2021 fourth-round draft pick Joshua Kaindoh.
Clark was charged in California with felony possession of an assault weapon stemming from a traffic stop in March. In June, he was arrested in Los Angeles after police said they saw a submachine gun in his car.
Chiefs players begin reporting to training camp at Missouri Western State University in St. Joseph on Friday.
Information from The Associated Press was used in this report.