Other Apple AirPort routers like the AirPort Express, AirPort Extreme and even another Time Capule are compatible products that will "extend" the wireless network using wireless only....or "extend" with an Ethernet connection between the Time Capsule and extending device, which is the preferable method to extend a wireless network.
Sorry, I am confused because you say that you want to extend using wireless, but you only have one Ethernet cable.
Do you plan to connect the AirPort Express to the Time Capsule using wireless only? (An Ethernet cable would not be used in this type of setup)
Do you plan to connect the AirPort Express to the Time Capsule using a wired Ethernet cable? (Which will remain permanently installed)
We ask because the configuration is different depending on your goals.
Please study the following support documents from Apple linked below regarding an "Extended Network" using wireless only and a "Roaming Network", which uses an Ethernet connection between the Time Capsule and AirPort Express.
Both documents provide "how to" instructions for your OS X 10.6.8.