McInally, 25, who has two Scotland caps, has agreed a new deal with the Pro12 club until May 2018.
"I've been part of this process of rebuilding since head coach Alan Solomons arrived," he said.
"I'm now coming through in my new position as hooker and it's a really exciting place to play at the moment."
McInally, who will captain Edinburgh for a second time against Agen in the European Challenge Cup on Friday, joined his hometown club in 2010 after captaining Scotland Under-20s at the Junior World Cup.
He played primarily at number eight or as a flanker before making the switch to hooker in 2013.
After a period on loan with Bristol, he made his debut for Edinburgh in his new role in February.
He won his first Scotland caps during the 2015 summer Tests and was named in Vern Cotter's Rugby World Cup squad before having to withdraw because of injury.
McInally, who signed a one-year contract in April, paid tribute to assistant coach Stevie Scott for helping him switch roles.
"It's brilliant being able to work with Stevie, who puts such an emphasis on our set-piece and that's always the thing I was going to need to work on, coming from the back row," he said.
"It's helped me to progress and I don't feel there's a better place for me to improve at the moment than here."
Solomons said McInally's decision to stay was "great news"  for the club.
"He is a terrific player, a great bloke and an outstanding leader," Solomons added.
"I firmly believe he will play a huge role in the future of the club. I look forward to continuing to work with him."
Stuart McInally has signed a contract extension with Edinburgh after making a successful transition from the back row to hooker.