The club legend this year became the first player from either West Australian AFL club to reach 300 games.
Pavlich, 32, said the club had approached him earlier this season about continuing a decorated career that began when he was drafted in 1999.
“Clearly, when you get to this age, it’s a mind and body decision,” he said.
“We sat down and had a bit of a chat about where I was at.
“I spoke to Ross (Lyon) and our medicos, and then I had a good chat with (wife) Lauren.
“It was more about whether or not I could keep playing my role for the team and keep playing at a reasonably high standard. That was important in the decision making process.”
Fremantle general manager of player management Brad Lloyd said Pavlich’s one-year deal was a big boost for all involved with the club.
“Matthew has been an outstanding contributor to the football club since the day he walked in,” he said.
“We are very pleased that he will be representing the club again in 2015 and building on his stellar career to date.”
Pavlich’s previous contract extension came in 2010, just days before the club took on Geelong in a Semi-Final at the MCG.
He signed a four-year deal that was to expire at the end of the 2014 season.
The Freo captain was asked four years ago if he had thought about when his career would end, but he was unable to give an answer.
Pavlich admitted the finish line was clearer now.
“Thinking back four years ago, even then it was, ‘that’s a long time to keep playing’ because no one from WA had played for that long in their career or for that many games,” he said.
“This is uncharted territory, but we’ll just keep pushing forward, and as long as my mind and body are willing, I’ll keep going.
“Of course, there comes a point where the law of diminishing returns.
“Certainly, I think I entered this season with the view that it could well be my last. It’s something that we’ll keep monitoring as we go.”
Signing Pavlich for at least another season has continued the club’s great recent run of keeping its stars in purple.
Midfield superstars Nat Fyfe and David Mundy both signed three-year extensions in the past fortnight.
Pavlich said the extensions were ‘extremely important’ for Fremantle in its pursuit of sustained success.
“(They’re) two players at differing stages of their careers, but incredibly important to our midfield group and to the group in general,” he said.
“Two leaders in their own right who are really well spoken and driving the club to really high standards and setting the tone with accountability and the player-driven culture that we talk about.
“I’m really pleased that both of them can stay for a further three years and I’m really excited at what that means for the club.”