The contract extension, disclosed Monday in a Securities and Exchange Commission filing, is scheduled to run through June 2016. However, Carey has an option to leave at the end of 2015 as long as he informs the company of his intention by July of next year.
Keeping Carey has been a top priority for the 83-year-old Murdoch, but the short-term nature of the contract may not ease concerns on Wall Street about future leaderhip at 21st Century Fox, the parent of Fox Brodcasting, 20th Century Fox movie and TV studios and cable channels Fox News and FX.
Well-regarded for his deal-making skills, Carey, 60, has spent much of his career at Fox and has been Murdoch's No. 2 since 2009.
In March, Murdoch unveiled his succession plan that positions his two sons, James and Lachlan, in key leadership positions at both of Murdoch's media companies.
Still, Wall Street remains a fan of Carey's and some investors still believe that neither of Murdoch's sons is ready to step and run the company.
Murdoch's youngest son James appears to have the inside track to eventually succeed his father. He was named co-chief operating officer in March, and has taken on more responsibility in Fox's TV and movie operations in the United States.
But James Murdoch is still tainted by the phone-hacking scandal that led to the closure of Murdoch's British News of the World tabloid. The younger Murdoch was in charge of Murdoch's U.K. publishing operations during the time of that scandal and although he was not charged with any crimes, his leadership skills and handling of the matter were seen as lacking.
Murdoch's oldest son Lachlan, who at one time was also seen as his father's successor, was named a non-executive co-chairman of 21st Century Fox as well as the publishing company, News Corp.
If Carey does decide to leave early, he will remain as a consultant to 21st Century Fox on a non-exclusive basis. He also would be prohibited from joining a rival company until after June 2016.
Carey is one of the most well-compensated media executives in the industry. Last year, his pay package was valued at $27 million.
Separately, 21st Century Fox also said board member Alvaro Uribe was resigning effective at the end of the month. A search is on for additional independent directors.
Follow Joe Flint on Twitter @JBFlint.