The 38-year-old’s decision gives the Edinburgh club four centre-backs for the new campaign, with the Austrian Peter Haring due to sign this week.
Haring, 25, has arrived in Edinburgh and passed a medical after leaving SV Ried in his homeland. He invoked a release clause in his Ried contract after they failed to secure promotion and has now agreed terms to become Hearts’ ninth summer signing.
Hughes deliberated over his future for much of the close season but has now chosen to continue playing. He has extended his Hearts career by another 12 months and is then expected to retire next summer.
He and Haring will compete for central defensive places with captain Christophe Berra and John Souttar in manager Craig Levein’s new-look squad.
Hughes told HeartsTV: “I needed a little bit of time to figure out if I was able to do another year, mentally and physically.
“I came to the decision that I’d like to stay on and I’m very grateful to the club for giving me the opportunity.
“When I say it was an easy decision, once I’d come to the decision to play, it wasn’t hard to have a chat with the gaffer and say I wanted to stay on.
“I’ve enjoyed my 18 months here immensely. The club has been great with me since I came back from abroad, so there was no hard decision to carry on after I knew that I could do.”