Caceres will remain in Melbourne for the Hyundai A-League 2017/18 Season, having made 30 appearances in all competitions during the last campaign.
"I'm very excited," the 24-year-old said.
"I feel that as a club and as individuals we've learned a lot from last season and I think everyone is in the right frame of mind to build upon what is already here and improve on things.
"There is a bit of unfinished business here and I'm keen on improving as a player and as a person so hopefully I can deliver my best.
"I enjoy the facilities that the Club offers and the environment in the changeroom is great.
"Everything is here for us to work well and it is up to us to take it to the next level so I am excited by the challenge.
"I think we as a team and myself as a player have the same ambitions as the start of last season which is to win every bit of silverware we can win.
"It is a long way to go but that goal is always at the forefront of our minds as players so we will be working towards that over the course of the pre-season and hopefully I can be a big part of that success this year."
The midfielder found the back of the net twice during the last campaign, recording four assists and creating 23 chances in an impressive run of form in the second half of the season.
Meanwhile, City also confirmed on Friday that midfielder Paulo Retre has been released from the final year of his contract.
The 24-year-old made 54 league appearances for City across five seasons after making his debut for the club in 2012/13.
He scored his only goal for City in the Melbourne Derby in 2015.
This article was originally published at: http://www.melbournecityfc.com.au/article/melbourne-city-fc-re-signs-midfielder-anthony-caceres/2nrzxfj5xdxx1ryj1poekw7k2.