Byfield was set to see his initial agreement expire in January but his contribution to Walsall's promotion charge has now been suitably rewarded and he could not be happier.
"I'm absolutely over the moon," he said. "This club has developed so much over the years and I am thrilled to be part of it again. The manager, (assistant) Martin O'Connor and the chairman have all been brilliant to me and showed exactly how much they want me here, which means a lot.
"Being back in the midlands is a big thing and being able to go to work with a smile on my face is important. There is an awful lot of emerging talent here and it is up to me and the other experienced lads to help bring it on."
Manager Chris Hutchings added: "We are delighted Darren has signed a new deal. He has been in good form since returning to the club and we have all enjoyed working with him. It's an important signing and one that we are all very pleased with."