Speaking to the Evening Times the manager said, "Stephen is on holiday in Ireland right now, but we have talked things over and I am happy we have a positive understanding.
"I have said all along how highly I value Stephen's presence both on and off the park at Motherwell. We are a young side, possibly the youngest on average in the SPL and his leadership is absolutely vital to us.
"If you look at the way young lads like Stevie Saunders and Shaun Hutchinson have progressed over the last season or two then Stephen's influence has been a huge part of that."
Last season was Stephen's testimonial (though we await details of the usual friendly in his honour) and he capped it be leading his team out to the Scottish Cup final.
He will celebrate his 35th birthday in October and was first signed on at Fir Park in 1994 when Alex McLeish gave the promising 18 year old a move from Bangor. He was to stay until 2000 and then joined Partick Thistle where he was to earn his first three caps. He helped the Firhill side to promotion and played well over a hundred times for them.
Terry Butcher brought him back to Motherwell (much to the annoyance of Thistle as we were in interim administration at the time) and he became a fixture in the centre of our defence.
His international highlights include a wins against England in 2005 and against Spain in 2006. He was given the captain's armband in the NI tour of the Americas last year and later led his team to an impressive win in Slovenia in the Euro 2012 qualifying campaign.
The club has given one year contracts to three graduates from the youth squad. Jamie Pollock, Steve Howarth and Ross McKinnon have signed on for next season.