I’m on H1 and my dependent (Wife) and my son passport are renewed here in US. how do I get their I94 updated with the new passport details and get I94 expiry date extended? do I need to mandatorily extend I94 while staying in US?

If the 1-94 is expiring you need to get it extended by filing a form I-539. If you let the I-94 expire you will fall out of status. When you fill out the new I-539?you will submit the new passport. If your I-94 is not expiring you do not need to file an I-539 or update the new passport information.