The 27-year-old's deal was due to expire this summer but he has agreed a new one that will see him stay at The City Ground until the end of the 2005/2006 season.
He told the official website: "It's all happened very quickly but once Forest made me the offer I was very pleased to talk to them.
"I am very happy at the club and as a family we are settled in Nottingham so I didn't really want to think about leaving."
He managed 29 goals last season and formed a deadly partnership with Marlon Harewood. He already has two goals this term after strikes against Coventry and Norwich.