The right-back was not put off staying at Easter Road by Hibs’ Premiership play-off defeat by Rangers and has signed a two-year deal.
The 27-year-old told Hibs TV: “I’m delighted to be in a situation where I’ve been able to extend my deal with Hibs – I’ve thoroughly enjoyed my first season at the club.
“As much as it was disappointing not to achieve our goal of promotion, I’m still very excited about the future and I was desperate to be a part of it. Next season we need to make sure that we hit the ground running. The manager has spoken to us as a group and told us we need to put down a marker early on and get back to the Premiership as early as possible.”
Head coach Alan Stubbs added: “This is great news as we continue to prepare for next season and it will give everybody here at the club a lift. I’ve also decided to appoint David our new club captain and I’m sure he will be well equipped for the role.”
Gray, who spent five years on the books of Manchester United as a youth player, has enjoyed an impressive debut season with Hibs. The defender made 34 appearances for Stubbs’ side and scored three goals, netting in wins against Rangers at both Ibrox and Easter Road and also in the Scottish
Cup victory over Alloa. Craig, formerly with Falkirk and
St Johnstone, was not offered a new deal following his two-year stay in the capital. The 28-year-old midfielder scored 12 goals in 74 appearances for the club and played his last match for Hibs on Saturday when they failed to overcome Rangers in the play-off semi-finals but has now been told he is surplus to requirements.
Craig said: “Naturally I’m disappointed to leave Hibernian, but I would like to wish everybody associated with the club all the best for the future. The reaction from the crowd at the end of Saturday’s game was absolutely magnificent and I believe Hibernian will now build on the progress made over the course of the season.
“I always wanted to finish on a high at Hibs, but unfortunately that wasn’t to be, nevertheless it’s a special club with great supporters and I was very proud to captain the team.”
Stubbs added: “I would like to thank Liam for everything he has done for the football club – he is a model professional and has been a great ambassador for Hibernian.”