The 31-year-old’s new deal means both he and Hamilton are under contract until the end of the 2018 season.
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While title rival Nico Rosberg, celebrated his new £34m two-year deal announced only hours before, by topping times by over half a second.
Recent reports had suggested Rosberg would be leaving the Silver Arrows at the end of the current season after enduring a fractured relationship with team-mate Lewis Hamilton.
Rosberg leads the championship with 168 points halfway through the 21-race season, one point ahead of world champion Hamilton.
The slow, twisting track of the Hungarian Grand Prix could prove challenging Sunday for the Mercedes teammates who have collided twice already this year.
Hamilton’s crash, which ruled him out of the rest of the session, opened the door for his newly-re-signed teammate and Rosberg duly topped the timesheets with the quickest time of the weekend so far, a 1:20.435 on the supersoft tyre.
“I’m feeling great out there and the auto is very quick, so it was a good start to the weekend”.
Hamilton has won at the Hungaroring four times since his career started in 2007, but Mercedes are yet to win here since the start of the hybrid engine era in 2014. “Now we’re trying this and I think it’s ok”. With Ricciardo in second and his team-mate Max Verstappen in fourth, the Milton Keynes-based outfit do indeed appear to be the closest challengers to the sport’s all-conquering team. They must have the situation well under control now, however, to be prepared to go for two more seasons.
Early forecasts say there is a slight chance for showers on race day.
McLaren’s Jenson Button finished a commendable eighth in both practice sessions, but British rookie Jolyon Palmer completed only a handful of laps after his day was plagued by a fuel pressure issue.
“I don’t put it down to the track, it was obviously me, I put the wheel in the wrong place”.
Sergio Perez, meanwhile, remains coy on his future despite being under contract at Force India for next year, according to team owner Vijay Mallya.
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“We’re actually in the race with Mercedes now at certain circuits which is great to see”, said team principal Christian Horner.
