The 20-year-old former MK Dons player has scored two goals this season in what has been an impressive campaign for the Ayrshire side.
"He is a model professional and has every chance in the game," said boss Mixu Paatelainen.
"He is a hard-working box-to-box midfielder who can score goals and is good at defending."
"I was over the moon to get my break under Jimmy Calderwood and I feel this season I have pushed on," said Kelly. "I want to push on again in 2011.
"A year ago I was just signing a six-month deal so things have changed a lot in that space of time. I'm happy at the club and everything is going great."
Meanwhile, Paatelainen is looking to strengthen his squad in January and hopes to land a new goalkeeper.
"We are close to coming to an agreement with one or two other players but nothing to say yet," said the Finn.
"Our budget is almost full but maybe with a little wheeling and dealing we are able to do something.
"We are also talking to a goalkeeper and very close to agreeing terms with him, just looking ahead to the future and trying to strengthen us for next season."