Step 1: Chain rule:
$f'(x) = \dfrac{\cos x - \sin x}{1 + (\sin x + \cos x)^2}$. The denominator is always positive.
Step 2: Sign:
The sign of $f'$ is the sign of $\cos x - \sin x$, positive when $\tan x < 1$ on $(-\pi/2, \pi/2)$, i.e. for $x < \pi/4$.
Step 3: Pick the interval:
So $f$ is increasing on $(-\pi/2, \pi/4)$, option (D).
Final Answer:
The function increases on (-pi/2, pi/4).
\[ \boxed{\text{(D) }\left(-\dfrac{\pi}{2},\dfrac{\pi}{4}\right)} \]