The Omani international had considered buying out the remaining year of his contract to move on this summer.
But he changed his mid, saying: "I will stay with the team. Everything is OK now and I'm enjoying life here especially as my wife gave birth to a girl six months ago.
"Things were great for me at Bolton and hopefully next year will be even better."
Al Habsi finished the season in fine style after Jussi Jaaskelainen missed the last 12 games with a back injury.
Jaaskelainen ended speculation about his own future this week by signing a new four-year deal.
Wanderers are now back in training and defender Gary Cahill can't wait for the new season to start.
The former Aston Villa centre half was outstanding after signing in last January's transfer window.
"It's very important for us to start the season well," he said.
"The sooner you get points on the board the better.
"We kick off with a great start with Stoke at home.
"Obviously they'll be fired up for it but we need to take the points from that and that will kick-start the rest of the season.
"It's important for us to start early and start well.
"It's the same for me as well. It's my first full season here and I need to get back to the fitness levels I finished at.
"I can't see there being any problems and I'm looking forward to it."
New boys Johan Elmander and Fabrice Muamba are also being put through their paces.
"It's good to bring in quality players who will help the team go forward and progress," added Cahill.
"It will increase the talent that is already in the squad but the new signings are good signs for the new season."
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levkopelev, bolton (15/07/2008 at 16:12)