Stewart was set to become an unrestricted free agent at the end of this season, but Port announced on Tuesday night that he had agreed to play on at Alberton Oval to the end of 2016.
Stewart was taken by Port with pick No. 23 in the 2006 national draft and has played 81 games in a career disrupted by injury.
This season, calf and knee injuries have limited him to four games, but he is now fit and has played the Power's past two matches.
Stewart's height (191cm), mobility and his ability to play in defence and attack make him a valuable player for the Power.
The South Australian said re-signing with the club he had grown up supporting had been an easy decision.
"My year has been a bit up and down with injury but I've really enjoyed the chance to play at AFL level when I've been called up," Stewart said.
"I've got real trust in Ken Hinkley, Garry Hocking running the SANFL side and the direction the club is going with our footy structure.
"It's been a great system for us as players to play to the same game plan in the SANFL and the AFL, and it's good for our supporters who can see the Power play one day and then the Maggies the next."
Port coach Ken Hinkley praised Stewart's willingness to play whatever role the team required.
"Stewie is a well-rounded team player, he offers us a lot in terms of his ability to play many roles," Hinkley said.
"He's great for the culture of the group and he works relentlessly at improving his game.
"Stewie has played good footy in the Magpies and has been unlucky with injuries this year.
"But what we have seen is when he has come in, he's stepped straight up to the level."
Port's announcement followed the release of the AFL's updated list of 2014 free agents on Tuesday evening.
There is just now one restricted free agent left in this year's pool, Western Bulldog Shaun Higgins, who AFL.com.au revealed last week is in heavy demand among rival clubs.
This year's biggest free agency fish Demon James Frawley also remains available, as are Sydney Swans defender Nick Malceski, Carlton spearhead Jarrad Waite and Collingwood utility Tyson Goldsack.
The remaining 2014 free agents are:
RESTRICTED FREE AGENTS
Shaun Higgins (Western Bulldogs)
UNRESTRICTED FREE AGENTS
Jason Porplyzia (Adelaide Crows)
Ash McGrath (Brisbane Lions)
Jarrad Waite (Carlton)
Tyson Goldsack (Collingwood)
Dustin Fletcher, Leroy Jetta, Jason Winderlich (Essendon)
Luke McPharlin (Fremantle)
Corey Enright (Geelong Cats)
Brad Sewell (Hawthorn)
James Frawley (Melbourne)
Michael Firrito (North Melbourne)
Tom Logan (Port Adelaide)
Chris Newman (Richmond)
Sam Fisher, James Gwilt, Clint Jones (St Kilda)
Adam Goodes, Nick Malceski, Ryan O’Keefe, Lewis Roberts-Thomson (Sydney Swans)
Sam Butler (West Coast)
Matthew Boyd, Daniel Giansiracusa (Western Bulldogs).
Twitter: @AFL_Nick
