The 43-year-old former Wimbledon and Bolton striker has committed himself to the Shots until the summer of 2014.
He told the club's website: "I am delighted to sign a new deal. My staff and I have worked extremely hard and the confidence that the club has had in us is fantastic. It is nice to be appreciated.
"We have taken some steps forward within the club and we are heading in the right direction. We know where we are at this moment in time and know what we want to achieve.
"It is a good place to be with the chairman and Rich Low, who has been significant in this agreement. We have confidence that we can continue making progress in the next couple of years.
"I am highly ambitious and I am enjoying management. The excitement of managing Aldershot just seems to be getting better and better. There is a buzz around the place and I want to help create more of that. I enjoy working at the club and there is a tremendous team spirit here."