Appointed in November as the club's third manager this season after succeeding Anthony Wilson who replaced David Staff, the 44-year-old enjoyed two successful spell as Daniels boss previously, first from 2005 to 2008 and then in 2012 when he returned before leaving six months later to join Boston United.
Stamford chairman Bob Feetham hailed the news in a statement released by officials at the Zeeco Stadium on Monday night.
Feetham said: "I am absolutely delighted. Both Graham and I have been anxious to put an end to some of the nonsensical speculation which has done the rounds. He is our manager, he is our choice - and he is here to stay.
"I have every confidence that the Drury influence will get us to where we want to be - and where those long suffering fans deserve to be. There may be set-backs along the way and the next 20 games will be a close run thing when it comes to dodging relegation.
"But it is important for everyone to remember that Graham will be influential in a long term strategy which looks at not just avoiding relegation but taking us onwards and upwards."
Drury said: "I am overjoyed to be back and signing this contract shows that I am fully committed to the project long term. These wonderful new facilities match my ambition of going back up to the Conference and it would be great to be the man who takes Stamford there for the first time in their history."
He added: "This is a big challenge but I am fully confident we can stay where we are and then push on in the NPL. It would give a lot of pleasure to make sure that happens for the fans. So I'm asking them to buckle up, sit back and enjoy the ride!"
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