He had been on the transfer list at Wolves and has now clinched a deal to stay with managerless Preston until the summer of 2013.
The 26-year-old has been enjoying his time with the Lilywhites and is eager to find out who the club will appoint as Alan Irvine's replacement.
"It's exciting times for the club right now," Collins told the club's official website.
"Obviously last week was a tough week with the manager leaving, but now we have got to look forward to the future.
"I am certainly delighted with the first few months I have been at the club.
"This is a great club with a great stadium, great fans and a good bunch of players and obviously we look forward to the challenge of a new manager coming in as well."