Davey, 23, burst onto the AFL scene in 2007 and was instantly recognised for his pace and remarkable skill level.
Essendon team manager David Calthorpe said the club’s football department was also impressed with Davey’s tackling and defensive pressure.
“He is an excitement machine,” Calthorpe said.
“When he gets the ball he is explosive and exhilarating. He lifts everyone around him – whether it be his teammates or the crowd – and brings everyone into it.
“You never really know what he is going to do but he always produces something exciting.”
Taken with selection 36 in the 2006 national draft, Davey’s 2008 season ended prematurely due to a knee injury.
“He may have been forgotten in some respects because of the development that we have seen from our younger guys this year but he will certainly make an impact when he returns,” Calthorpe said.
“He is a significant re-signing and should take some pressure off our small developing forwards next season.”
Davey has played 19 games over his two years at Essendon and kicked 20 goals.
Davey is among a number of players to commit to the Club this season. Others include; Scott Gumbleton (signed until the end of 2010), Heath Hocking (2009), David Hille (2010), Bachar Houli (2010), Leroy Jetta (2010), Jason Laycock (2010), Sam Lonergan (2010), Mark McVeigh (2010), Angus Monfries (2010), David Myers (2010), Kyle Reimers (2010), Henry Slattery (2010) and Jobe Watson (2010).
