McGowan, 24, played every minute of Adelaide's successful 2015-2016 A-League campaign and said: "If I'm going to stay in Australia then I want to stay with the champions and win more trophies.
"Our boys have really worked hard over the last few years to make a very good squad and the majority are still here - if I'm going to stay in Australia then United's where I want to be.
"We're still on cloud nine after winning the league and how we did it was extra special, and I know that in years to come people will look at last season and realise how big of an achievement it was."
South Australian-born McGowan started his professional career in Scotland with Heart of Midlothian, having loan stints at East Fife and Gold Coast United, before returning to Adelaide under former coach Josep Gombau.
"I'm hoping to have another really good season and hopefully put myself in the shop window as I still have aspirations to play at the highest level possible. And if the right opportunity comes up, I'd have to consider it," McGowan said.
"But for the moment I am really happy to sign on for Adelaide United and play on the big stage as champions.
"I think that the drive is immense once you've tasted success and for me, playing in front of a full stadium and seeing how much it meant to the public has just made me want that again, and now we also have the Asian Champions League to aim for."
Adelaide's general manager of football, Ante Kovacevic, said: "Dylan is a very high-quality defender and he showed that each week last season, so, of course, we're delighted to have him on board for the new season.
"Dylan's understanding of the game is fantastic and the experience he has for someone who's only 24 is brilliant.
"His leadership at the heart of our defence truly helped our successful season last campaign and having him pop up with a goal on occasion is a great asset to have.
"We believe Dylan is one of the most well-rounded players in the competition and we're glad to have him part of our 2016-17 A-League season and also for our AFC Champions League campaign."