The Dane, who joined the team in 2019, is heading into his fourth year as a professional and is set to target the spring Classics after taking the biggest win of his career at Paris-Tours at the end of last season.
Pedersen also made his Tour de France debut last season, helping the team to three stage victories courtesy of Søren Kragh Andersen and Marc Hirschi. He said that staying at DSM was the best option to continue his development as a rider.
"A big part of the reason of why I first joined the team was my trust in the way Team DSM worked with its young riders and the professional approach to every aspect of becoming a good bike rider – whether that was nutrition, optimised training plans or tactical planning for the races," he said.
"My goal was, and still is, to develop myself to become the best rider I possibly can and in the last two years my development has been going well with the team. I believe we can continue this trend and I feel really comfortable with the riders and staff, so extending was an easy decision for me to make. I believe I can continue to get better and better over the next years and achieve great things together with the team."
Pedersen, who turns 25 in March, was set to race the rescheduled spring Classics last season, but his season was ended early after suffering a concussion after a crash at Scheldeprijs. Now recovered, he's set to race a full slate of Spring Classics in 2021, from Opening Weekend to Strade Bianche and the WorldTour cobbled races, culminating in the Tour of Flanders and Paris-Roubaix.
DSM's head of coaching, Rudi Kemna said that the team has been pleased with Pedersen's development thus far in his career, also praising his ability as a lead-out rider for sprinter Cees Bol.
"We're pleased to have Casper with us for another year in 2022," he said. "Since he's been with us, he's really developed well as a rider and we're really happy with how we work together. He's shown to be very strong as part of our sprint group and that's where we see him developing in the future.
"It's not only his ability on the bike that we're impressed with, but his ability to read a race is very good and he offers experience and the tactical nous to make a quick and well-informed decision on the bike; something that is really important in hectic sprint finishes. We're looking forward to continuing to work together with Casper, to help him improve even more as a rider and achieve some more good results."
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