Baldwin almost went out on loan to Hereford earlier this season when Kit Symons took over as caretaker manager, following Geraint Williams's departure, but he decided to stay with Colchester.
"With the players the manager wants to bring in I think we can have a decent season next year and I'd like to be a part of that," said Baldwin.
The 26-year-old centre-back joined Colchester from Chelsea in 2002 and played a major part when they were promoted to the Championship four years later before last season's relegation.
Colchester struggled to adjust to life back in League One and Baldwin is keen to return to the higher level.
"We just haven't been good enough this season, we win a couple of games and then slip up when perhaps we shouldn't but this is a hard division," he added.
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