As revealed earlier on Tuesday by sportsnewsfirst.com.au, Carrazzo and his management finalised the details of his new contract this week in the lead-up to the Blues' NAB Cup grand final appearance.
Carrazzo, 29, is one of the favourites to take over the captaincy from his superstar teammate Chris Judd, who will stand aside officially from the top role before the start of the home-and-away season.
The tough midfielder is set to go head-to-head with fellow on-ball division leader Marc Murphy for the captaincy in the new era under master coach Mick Malthouse.
Blues football manager Andrew McKay says Carrazzo was a key signing for the club ahead of the new season.
“Andrew’s form last season was some of the best we have seen from him, so this is obviously a major win for the club,” McKay said.
“He is highly regarded by everyone here at Carlton, and the fact he finished sixth in last year’s best and fairest even though he missed a large chunk of the season through injury, indicates how significant he is to our team.”
Carrazzo has played 154 games for Carlton since his debut way back in 2004.