Ramo will earn US$3.8 million, a raise from last year.
The 29-year-old went 15-9-3 with a 2.60 goals-against average and .912 save percentage in his second season in Calgary.
Ramo replaced Jonas Hiller in net for the Flames in their second-round series against the Anaheim Ducks.
Joni Ortio needs to clear waivers to get sent to the minors, so it's unclear what the Flames' goaltending situation will look like.
Ramo has a 2.92 GAA and .905 save percentage in 122 NHL games.