The Jets, who are owned by financially troubled mining mogul Nathan Tinkler, failed to reach the play-offs this year after finishing eighth in the league.
"I'm pleased to be extending my stay in Newcastle for another year," Heskey said.
"Everyone has made me feel very welcome here and I've really enjoyed my first season playing for the Jets.
"I'm looking forward to getting a full pre-season under my belt and helping the team push for a finals place next season."
The 35-year-old former Leicester City, Liverpool, Birmingham City and Wigan Athletic player won 62 caps for his country, scoring seven goals and playing at two World Cups, but moved to Australia after being released by Premier League Aston Villa last year.
Along with former Juventus and Italy forward Alessandro Del Piero and Japanese standout Shinji Ono, Heskey had helped considerably boost the A-League's international profile.
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- Nathan Tinkler