In signing the 36-year old star and national team veteran to a one year extension, the club put an end to speculation surrounding Larsson’s future that has been swirling in sporting circles since October.
“I decided that I felt motivated. If you don’t have motivation its not worth continuing,” said Larsson on the Helsingborgs Dagblad website.
“I feel I can still deliver at a top level,” he added.
News of Larsson’s decision to continue with the club comes as it searches for a replacement for coach Stuart Baxter.
“It obviously means a lot for both the club and for Swedish football,” said Helsingborg club chair Sten-Inge Fredin.
One of the most successful and well-known Swedish football players of modern times, Larsson helped Scottish club Celtic to four league titles and took part in Barcelona’s two league championships in 2005 and 2006. Nevertheless, he has yet to win a national title in his native Sweden.