The 31-year-old has signed a one-year contract extension, which will keep him at Ewood Park until the summer of 2015.
The former Portsmouth player joined Rovers in February and made his debut in the historic 1-0 victory away to Arsenal in the FA Cup.
After missing a month due to an ankle injury, Lee returned to play an important role in Rovers’ fight for survival and is looking to kick on further in the forthcoming campaign.
“I came here on a short-term contract, so I’m happy that it has now been extended,” he said.
“I like it here. It is a big club, there are a lot of good players, the structure is good, the ground and the following from the fans.
“Now I’ve signed an extension here I can establish myself and this club can push forward. As a player there is always room to improve, so hopefully I can show that this coming season.”