The 33-year old former Aalborg and Leicester City gloveman joined the club ahead of the 2010 season and was a mainstay in goals during the campaign and has been rewarded with a further year on his deal according to sporten.tv2.dk.
Although there has yet been no announcement from the club, the website quoted Nielsen as saying he had signed a fresh contract to remain with Kansas City for at least the 2011 season.
"They want to keep me, and I want to stay here. So I could not see that there would be no reason why I should not be," he said.
"It's a 1-year contract. That was what I wanted and it was we agreed on. So we negotiated a little about salary, and after a month's time, we also agreed on it."