The 30-year-old Venezuelan joined Chiefs in 2023 and immediately made an impact at the Naturena-based club with his impressive performances.
However, Castillo has featured sparingly this season after suffering an injury against SuperSport United in October of last year.
The midfielder, whose contract was set to expire at the end of the current season, is now back in training and is said to be working on his match fitness.
"Edson (Castillo) is going to stay for another season; he has renewed his contract, and there's also an option for another year," a source revealed to the South African.
"He will return to the team soon, he's back in training. It's possible that before the end of the month, we'll see him feature and get some minutes.
"He's working on building his match fitness again, but yes, he's going nowhere, it's confirmed for at least another season."
Castillo's contract extension and his return from injury should be a significant boost for coach Nasreddine Nabi, who will now have more options in midfield as he aims to lead AmaKhosi back to their glory days.
Former Kaizer Chiefs winger Joseph Malongoane has urged Amakhosi supporters to remain patient with co-coaches Khalil Ben Youssef and Cedric Kaze, arguing that the pair needs time to understand the unique demands of South African football.
Kaizer Chiefs winger Asanele Velebayi says his early months at the club have been a steady, game-by-game learning process as he finds his feet in the top flight.
Kaizer Chiefs co-coach Khalil Ben Youssef has admitted his side continues to struggle in front of goal but insists the team is working hard to solve the problem ahead of Sunday’s clash with TS Galaxy in Mbombela.
Orlando Pirates captain Nkosinathi Sibisi is keeping his focus sharply on the Carling Knockout Cup title as his team tops the Betway Premiership table with 28 points after 12 games.
