It will be the 17th NHL season for the Senators captain and the final year of the contract he signed in 2008.
"I'm excited to get ready for another season," the 39-year-old Alfredsson said from his hometown of Goteborg, Sweden.
"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 fitter and stronger than I did last year."
Last season Alfredsson registered 27 goals and 32 assists in 75 games, while recording 18 penalty minutes and a plus-16 rating.
He also potted two goals in four games during the Senators' Eastern Conference quarter-final series against the New York Rangers.
"Daniel's contributions to this hockey team cannot be understated. He is a leader and a mentor to many of our young players," said Senators general manager Brian Murray.
"Daniel is also a great hockey player and we expect him to return and continue to be one of our best players as we look to improve on last year's accomplishments."
Alfredsson was named the 2012 winner of the King Clancy Memorial Trophy for exemplifying leadership qualities on and off the ice, and making a noteworthy humanitarian contribution in his community.
"Daniel is an exceptional captain whose commitment to his teammates and to the great City of Ottawa is second to none," said owner Eugene Melnyk.
"I couldn't be more pleased with the outcome and look forward to Daniel having a great year and adding to his long list of extraordinary achievements with our hockey club."
Alfredsson has served as Ottawa's captain since 1999 and leads the franchise in games played (1,131), goals (416), assists (666) and points (1,082).