The 31-year-old, who joined the Reds in 2014, has the option to extend his stay at the West Sussex club by a further year as part of the deal.
Harrold scored nine goals in 39 appearances last season.
"I know what he can bring. He can handle himself physically but his touch and positional play is excellent," Crawley head coach Dermot Drummy said.

From mid-June councils will have powers to issue penalty charge notices to the registered owner of a car, regardless of who littered.
CCTV images will be used to record number plates and trace owners, said London Councils.
The AA said the majority of its members wanted tougher penalties for people who drop litter from cars.
Littering is already a criminal offence which incurs a fine, under the Environmental Protection Act.
To prosecute someone for littering from a car required proving beyond reasonable doubt which passenger disposed of the rubbish, which is very difficult, said a spokesman for London Councils.
But the organisation which represents London's 33 councils put a private bill through Parliament to amend the London Local Authorities Act so that the owner of a vehicle or pedicab will be liable to pay littering fines.
Council officers and Police Community Support Officers will be among those who can issue penalties, said London Councils.
The exact level of fine will be decided on 14 June and the new law should come into effect on 18 June.
An AA spokesman said the organisation's research suggests the majority of drivers in London and Britain would like greater penalties for littering from cars.
In a survey of 1,628 AA members in London in 2009, 58% said they loathed motoring "litter louts" enough to support tough penalties, such as points on their driving licence, large fines and community sentences.
Ninety-three percent agreed that roadside litter gave a bad impression of Britain and spoilt local communities.
Seven per cent admitted littering.
He said: "A cigarette thrown from a car will spark and make a driver jump. Similarly a container coming at your windscreen will make you duck."
But he pointed out that enforcement will be an issue and there will be cases where items are dropped accidentally.
He said: "In amongst rubbish you will always find a baby's dummy and know that it's unlikely that its mother wanted that littered.
"What happens if a six-year-old opens the back door, drops something and walks off? That could be littering."

The blue chip index of US stocks remained above the 20,000 mark at 20,093.72 but fell 7.19 points.
Lower than expected GDP growth for the fourth quarter dampened sentiment.
Chevron, the US oil giant, also weighed on the index after releasing lower than expected quarterly results which sent its shares down 2.3% to $113.79.
Microsoft led the risers to close up 2.3% at $65.78.
The S&P 500 fell 1.99 points to 2,294.69 while the technology-heavy Nasdaq rose 5.61 points to 5,660.78.

29 May 2016 Last updated at 00:05 BST
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