I'm not against extending TO unless he wants up front money or guaranteed money. Otherwise, I say let him playout next year and then see how he is doing. Positions like RB, WR, and CB are heavily effected by physical deterioration from age.
A rule to live by, never sign a big/long term contract with a RB over the age of 30. It's just not a good deal. The same usually goes for WRs also. One big thing you must look for is dedication to ones body. TO, Rice, Seau, and several others do not let their body go during the offseason, and they are in the gym before everyone else and after everyone else. Newman I've heard is the same way.
If you sign a player over the age of 30 to a big contract, he MUST be a gym rat that believes in 365 days a year of health and conditioning.
While sometimes you can get away with not following the rule of thumb, it's a very high risks to do so. Every year over 30 TO gets, that risk rises significantly. Especially with the fact that he is one of the three positions that are effected the most. He is 34 now, with a year left. If you give him a three year extention, you're paying him top dollar until he is 38! If you give a signing bonus or guaranteed money, thats a huge risk.