The striker, who can also play in central defence, was the third new player to commit himself to the club in the summer of 2013 following Cammy Bell and Nicky Law.
Daly had spent the previous six and a half years playing in the SPL for Dundee United, scoring 70 goals for the Arabs in all competitions.
Three of them came against the Light Blues, including the second in his team’s 3-0 Scottish Cup victory at Tannadice in February 2013.
Dublin-born Daly started his career with Stockport and had extensive experience in England’s lower leagues before he moved north of the border in 2007.
He has also played for Bury, Grimsby and Hartlepool, grabbing 108 career goals in total so far.
Daly found the net 15 times for United in his final campaign including two in the Scottish Cup semi-final meeting with Celtic and made 44 appearances in 2012/13.