The Leesiders have announced that they have secured the signature of the young midfielder ahead of the 2013 League of Ireland season
Kenny, 19, who can play in midfield or as a forward, played an instrumental role in Cork City's under-19 team last season and made 14 appearances for Tommy Dunne's side during the 2012 campaign.
Speaking to the club's official website, Kenny said that he was 'pleased' to have secured a new deal ahead of the new season.
"I am pleased to have signed a new deal with the club," he told corkcityfc.net. "Looking ahead to next season, I am aiming to be in the first team squad every week and hope to play more regularly than I did last season."
Cork City manager Tommy Dunne described Kenny as an 'exciting' player and praised the value of the club's youth system.
He said: "Stephen is an exciting young talent who was an integral part of the success the club had at Under 19 level last season, and I am happy that he has signed a new contract with the club."
He added:"I am also pleased that this is another player who has come through our underage set-up at the club.
"With the current climate that is something we have to do, but it is also the way we want to run our club," said Dunne.