Cuddyer hit a career-high 32 home runs to lead the team. He also had 94 RBIs and was sixth in the American League with 73 extra-base hits.
When slugger Justin Morneau went out with a back injury in September, Cuddyer moved from right field to first base. He hit .352 with seven homers and 22 RBIs in the next 19 games as the Twins leapfrogged the Detroit Tigers and won the AL Central title.
The option is part of a contract Cuddyer signed in 2008. He will make $8.5 million in 2010 and be paid $33.5 million over the life of the four-year deal. If the Twins had declined the option, they would have owed Cuddyer a $1 million buyout.