Bishop had a clause in his existing deal triggering a 12-month extension if he started more than 20 matches for the club this season.
The 31-year-old midfielder has actually started all 24 of the Magpies' npower League One games this campaign.
Manager Keith Curle was happy to confirm that Bishop will now be at Meadow Lane until at least the summer of 2014.
"It's great he's going to be here for another year," Curle told the Nottingham Post. "He has led by example this season and is generally considered to be playing his best football since he's been at Notts.
"He's really enjoying the responsibility of being captain and he has a great attitude and work ethic as well. Neal is becoming the complete midfielder."
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