Smith, 32, has played 56 games for the Rapids, scoring six goals and adding 13 assists. Per league and team policy, terms of the deal were not disclosed.
"Jamie will be an important veteran presence on our young squad, and is a very talented and intelligent player," said Rapids Technical Director Paul Bravo. "We're happy to welcome back for another season in Colorado, and look forward to his contributions to our team."
"I'm excited to continue playing for the Rapids," said Smith. "I enjoy being here, my family love it and I love it. I feel a part of this club and a part of the team and I'm excited to progress things."