Jones joined the Valiants in January on a short-term deal until the end of the season, but the former Sheffield Wednesday left-back has now committed himself to the Burslem club until 2015.
"Danny showed last season what he could do with some excellent performances in League Two," said Vale boss Micky Adams. "He has had League One experience with Sheffield Wednesday and this will be important next season."
Jones admits that Adams was a major factor in his decision to remain at Vale Park.
He said: "He put confidence in me from the day I signed, the way he spoke to me, and I felt part of the team. I felt wanted which is a massive thing for me.
"I have really been enjoying my football. As soon as the season finish I wanted to get it sorted out, now I can look forward to pre-season."
Jones made 16 appearances for Vale this season helping them secure their first promotion since 1994.