The Wild re-signed Backstrom to a three-year contract on Monday, keeping the veteran from becoming an unrestricted free agent next month.
"It just made too much sense not to re-sign him," general manager Chuck Fletcher said.
The contract is worth $10.25 million over the three years, sources told ESPN.com. The annual breakdown of the value is $2.5 million in 2013-14, $3.75 million in 2014-15 and $4 million in 2015-16.
Without much room under the decreasing salary cap, due largely to the mega-deals given to stars Zach Parise and Ryan Suter last summer, the Wild were in a tough place. Improving on their one-series-and-done playoff appearance will be difficult enough in the Western Conference, let alone without a true No. 1 goalie.
But Backstrom didn't want to leave, even if that meant not testing a free agent market that will be thin in the crease. When Los Angeles traded backup Jonathan Bernier to Toronto, the options shrunk further.
"It's business to do for me, but like I said, happiness is something that you can't buy with money. It's something in your heart and in your mind," Backstrom said on a conference call with Minnesota reporters. "So that's the most important thing for me, to be happy."
Backstrom just finished a four-year, $24 million contract. He will be 38 at the end of the new deal, his fourth contract with the Wild, who signed him out of Finland in 2006.
The Wild have Bill Masterton award winner Josh Harding back in the net, too, after overcoming multiple sclerosis and taking over in the postseason following Backstrom's injury in warm-ups. But they badly wanted to keep the steadiness Backstrom has brought to the position over his tenure with the team.
"We're familiar with Nik. He's familiar with us. He's earned the trust of his teammates through his professionalism and his work ethic," Fletcher said. "Nobody's more prepared as a goaltender than Nik. I've never seen a goalie practice that hard, and you've got to give him a lot of credit. He's been a model of consistency. He just finds a way to win games year after year. At 35 years of age, I think in today's day and age the way athletes prepare, the way they train, there's no reason why he can't even play beyond this contract.
"Hopefully, this isn't the last contract he signs with us."
Backstrom went 24-15-3 with a 2.48 goals against average, a .909 save percentage and two shutouts in 42 games last season for the Wild. He tied for first in the NHL in victories and set a franchise record with an eight-game winning streak from March 14-30. Backstrom, however, sustained a sports hernia before the Western Conference quarterfinal series began against the Chicago Blackhawks and was unable to play in any of the games.
Backstrom, who had surgery on May 16, said he returned to the ice to skate on Monday for the first time since the injury.
With Harding adjusting to medication, and the Wild unwilling to rely on rookie Darcy Kuemper down the stretch while they chased their first playoff appearance in five years, Backstrom got heavy use. His performance sagged, too.
Whether or not his injury was preventable, he acknowledged discussions with the coaching staff about managing his workload -- including practice time -- as he enters this new contract.
"I don't think it had anything to do with the amount of the games or playing every night," Backstrom said. "It's more about wear and tear that happens for every player every year."
"We're not going to be able to bring our entire team back. There's going to be, certainly, some deletions, and there's going to be opportunity for some young players," Fletcher said, adding: "That's just the reality of the cap system."
Information from ESPN.com's Pierre LeBrun and Scott Burnside and The Associated Press was used in this report.