The Glovers acquired free agents Marc Laird and Ben Tozer on Friday and gave their fans a triple fillip shortly afterwards as Dawson agreed terms to keep him with the club until 2017.
The 24-year-old is closing in on 100 appearances for Yeovil since joining in 2013, but he has not played since picking up an injury in January.
“I am absolutely delighted to have signed a new deal at Yeovil,” he told the club’s official website.
“I cannot wait for the season to start. It has been a horrendous time with injuries for me but hopefully they are all behind me now.
“I had an operation a couple of weeks ago and that went well, so I hope to be back fully fit for the start of the season.”