diff --git a/pkgs/applications/editors/vscode/extensions/hashicorp.terraform/default.nix b/pkgs/applications/editors/vscode/extensions/hashicorp.terraform/default.nix
index b2c61f1b0867..d6a72f85ceef 100644
--- a/pkgs/applications/editors/vscode/extensions/hashicorp.terraform/default.nix
+++ b/pkgs/applications/editors/vscode/extensions/hashicorp.terraform/default.nix
@@ -7,14 +7,13 @@ vscode-utils.buildVscodeMarketplaceExtension {
   mktplcRef = {
     name = "terraform";
     publisher = "hashicorp";
-    version = "2.19.0";
-    hash = "sha256-k/fcEJuELz0xkwivSrP6Nxtz861BLq1wR2ZDMXVrvkY=";
+    version = "2.34.3";
+    hash = "sha256-kE9xH0cp741aCqhrwFDW+lQxOAsdLNzCCOTWMxd+li0=";
   };
 
-  patches = [ ./fix-terraform-ls.patch ];
-
   postPatch = ''
-    substituteInPlace out/serverPath.js --replace TERRAFORM-LS-PATH ${terraform-ls}/bin/terraform-ls
+    substituteInPlace dist/extension.js \
+      --replace-fail 'this.customBinPath=Ga("terraform").get("languageServer.path")' 'this.customBinPath = Ga("terraform").get("languageServer.path") || '${terraform-ls}/bin/terraform-ls';'
   '';
 
   meta = {
diff --git a/pkgs/applications/editors/vscode/extensions/hashicorp.terraform/fix-terraform-ls.patch b/pkgs/applications/editors/vscode/extensions/hashicorp.terraform/fix-terraform-ls.patch
deleted file mode 100644
index e2dcd0b70aa9..000000000000
--- a/pkgs/applications/editors/vscode/extensions/hashicorp.terraform/fix-terraform-ls.patch
+++ /dev/null
@@ -1,19 +0,0 @@
-diff --git a/out/serverPath.js b/out/serverPath.js
-index fafa915..2e6d376 100644
---- a/out/serverPath.js
-+++ b/out/serverPath.js
-@@ -18,7 +18,13 @@ exports.CUSTOM_BIN_PATH_OPTION_NAME = 'languageServer.pathToBinary';
- class ServerPath {
-     constructor(context) {
-         this.context = context;
--        this.customBinPath = vscode.workspace.getConfiguration('terraform').get(exports.CUSTOM_BIN_PATH_OPTION_NAME);
-+
-+        const customBinPath = vscode.workspace.getConfiguration('terraform').get(exports.CUSTOM_BIN_PATH_OPTION_NAME);
-+        if (!customBinPath) {
-+          this.customBinPath = 'TERRAFORM-LS-PATH';
-+        } else {
-+            this.customBinPath = customBinPath;
-+        }
-     }
-     installPath() {
-         return path.join(this.context.globalStorageUri.fsPath, INSTALL_FOLDER_NAME);