Liam O'Brien signed a two-year contract Sunday. Financial terms were not disclosed.
The 27-year-old forward could have been an unrestricted free agent at the end of this season.
"Liam is a hard-working player with great character who is always there to support his teammates," Coyotes general manager Bill Armstrong said. "He has provided our team with some added toughness and is very deserving of this contract."
O'Brien has scored three points (two goals, one assist) in 37 games this season. He leads the NHL with 106 penalty minutes.
Signed as an undrafted free agent by the Washington Capitals on Oct 5, 2014, O'Brien has scored eight points (three goals, five assists) in 66 NHL games with the Capitals, Colorado Avalanche and Coyotes.