Peter MacDonald (left) has had injury problems

The 24-year-old, who joined from Rangers in 2001, has netted 26 goals in 85 injury-interrupted appearances.

Manager John Connolly said: "Peter is a vital player for us and I believe we have not seen the best of him.

"If he can get a good pre-season stint done, I see him as being a player who can get 20 goals a season."

MacDonald has so far scored seven goals in 21 appearances this season.

"There were other clubs making tentative enquiries and I hope this move sends out a message about our ambitions," Connolly told his club's website.

"The rest of this season is about him gaining further match sharpness and then making a fresh start in July."

MacDonald, who admits that promotion is probably beyond his club this season, said: "The club have shown great faith in me and I'm delighted to sign as there's not much security in football these days.

"Realistically, we are all playing with a view to next season now and I cannot wait to make a fresh start.

"In my time at the club, I have only ever done one full pre-season, so I'm wanting to get a good start to 2005-2006 under my belt and get among the goals more regularly."