The 36-year-old midfielder was initially released by Fulham at the end of last season when his one-year contract expired after joining in September 2012, but he has now penned fresh terms to stay at Craven Cottage.

Karagounis, part of the Greece side that shocked world football by winning the 2004 UEFA European Championship, moved to Fulham as a free agent after leaving Panathinaikos.

He made 28 appearances in all competitions under Martin Jol last season, scoring twice, one of which was a fine chipped effort in an FA Cup tie against Blackpool.

Melbourne Victory and Melbourne Heart were both reportedly monitoring the availability of Karagounis, but he will remain in England with Fulham.

Karagounis has enjoyed two spells at Panathinaikos as part of a career that has also included spells in Italy and Portugal with Inter and Benfica respectively.

He has made a record 125 appearances for Greece.