Elliott kicked a career-high 60 goals this year and the unrestricted free agent was weighing up a three-year offer from the Suns.
The Magpies weren't willing to offer the 33-year-old anything more than a two-year deal, and Elliott ultimately decided to re-sign at Collingwood.
"Collingwood has been my home for the past 14 years and I can't wait to continue running out in front of the Magpie Army," Elliott said.
"Celebrating my 200th game earlier this year, surrounded by my family and teammates, will be something I'll never forget.
"I'm incredibly proud to be a Collingwood person. I look forward to seeing what we can achieve as a team over the coming years and creating many more memories."
Elliott produced one of the best marks of the season during Collingwood's 29-point preliminary-final loss to Brisbane.
It was in that game when Elliott was also controversially denied a front on free kick at a crucial stage of the final quarter when defender Brandon Starcevich made contact with him.
Elliott has kicked 347 goals over 219 games, and his signature is important as Collingwood attempt to keep the bulk of their squad together.
Key forward Brody Mihocek, who is also an unrestricted free agent, is weighing up an offer to join Melbourne.
In other news, Richmond key defender Tylar Young has requested a trade to West Coast.
The 27-year-old has played 35 games across his three years at Richmond, but only seven this year.
West Coast's bid to also snare Sam Butler has come to nothing after the 22-year-old re-signed with Hawthorn until the end of 2027.
The Eagles are still in the hunt for out-of-contract Brisbane midfielder Deven Robertson, who is also being chased by the Bulldogs.
Brisbane free agent Brandon Starcevich is weighing up a lucrative offer from West Coast.
Sydney ruckman Peter Ladhams has re-signed with the Swans for a further two years, tying the 27-year-old to the club until the end of 2027.
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