The Republic of Ireland international, 28, joined the club after his contract with Hearts expired.
Manager Andy Thorn believes the former Wolves and Sunderland forward is a strong addition to his Sky Blues squad as they look for a quick return to the Championship.
"We're really pleased to be able to get Stephen. We've got some really talented young players here, but we want to supplement that with experience too and Stephen brings that," Thorn told the club's official website.
"He works extremely hard for the team and can bring other players into play and we're delighted that he wants to be part of what we believe can be a winning team here at Coventry next season.
"I know there were clubs from the Championship very interested in Stephen, but our hard work has paid off in bringing him here."
