The 36-year-old goalkeeper will stay at Vicarage Road for another season with manager Gianfranco Zola hailing the experience and influence he brings to the side
The Spaniard spent last season at Vicarage Road, becoming a regular for Gianfranco Zola’s side who narrowly missed out on promotion to the Premier League.
The 36-year-old managed 11 clean sheets for the Hornets as they finished third in the Championship before losing the play-off final to Crystal Palace at Wembley.
Almunia will now spend another season with Watford after signing a 12-month contract, a move that has thrilled manager Zola.
“It’s fantastic that Manuel has signed a new contract for next season,” he told the club’s official website
“His experience and influence are so important for us and the impact he had at Watford last season was magnificent.”
Watford begin the new season with a trip to St Andrew’s to face Birmingham City on August 3.