There is a likelihood of another year extension for my job although it is not mentioned in the contract.
If you can get a statement from your potential employer to say this, it could make all the difference. Notice, INZ have to tick certain boxes, so they need a piece of proof for each one. The CO isn't going to be able to take your word for this future hope - someone is going to need to put it on paper.
This is the section the CO is referring to (my bolding). Admittedly, s/he is being rather nitpicking, because it could be said that you've got a period of work beyond the one-year minimum, but s/he's focusing on the option of further terms which is currently not proved in your paperwork.
Employment must be ongoing and sustainable. Ongoing and sustainable employment is:
an offer of employment or current employment with a single employer and permanent, or indefinite, or
for a stated term of at least twelve months with an option for the employee of further terms, and of which the employer is in a position to meet the terms specified; or
employment on a contract basis where the applicant:
has a consistent history of contract work, and
has a current contract for services, and
INZ is satisfied that such contract work is likely to be sustained.Note: When assessing whether employment is sustainable, officers may consider, but are not limited to, such factors as the residence status of the employer, the period for which the employing organisation has been established as a going concern, and the financial sustainability of the employing organisation.
http://www.immigration.govt.nz/opsmanual/i42642.htm