The franchise leader in games played (1,131), points (1,082) assists (666) and goals (416) scored 27 goals with 35 assists at age 39 last season. He was awarded the King Clancy Memorial Trophy, recognizing the player who best exemplifies leadership qualities on and off the ice.
Alfredsson said he took time to speak with friends and family about his future and the right-winger had the full support of his inner circle.
"I'm excited to get ready for another season," Alfredsson said. "I've been training for about a month and a half, and my body feels a lot further ahead of where it was last year at this point. I expect to come into camp stronger and fitter than I did last year."
Alfredsson was drafted in 1994 by the Senators in the sixth round and won the Calder Trophy (rookie of the year) in 1996. He's been team captain since 1999 and is a six-time NHL All-Star.