The Republic of Ireland full-back established himself as a key part of manager Martin Jol's plans last season and has now committed himself to the club until the end of the 2013-14 season.
The 28-year-old told the club's official website: "I'm delighted that it's sorted now and I can hopefully continue on from last year."
Kelly went on: "It was a really good end to the season with the way we finished off, the way we were playing and I just hope we can continue on with that again.
"Last season was fantastic for me, playing pretty much every game from Christmas onwards. To cement myself as the number one right-back was great and hopefully I can continue on with that this season.
"To sign another contract here is fantastic. I'm delighted to be staying at the club and I just want to carry on with the progression I've made over the last year or so."
Source: PA
Source: PA