The 27-year-old, who joined from Leyton Orient last summer, has been sidelined for two spells this season, but has caught the eye in the final month of the season to earn a new 12-month deal.
There is an option for Angol to spend a further season at the club if all goes well.
Hughes said: “We are pleased to have Lee on board for next year, and are looking forward to continuing to have him available.
"He is a very good footballer and an asset for us to have in our side. We enjoy working with him.
"Lee has done really well since coming back into the side, and I am pleased for him because everyone acknowledges what he can do as a player, and the impact he has when he is fit and on form.
"He has had a strong end to the campaign, and will be able to take confidence from that heading into next season and beyond."
The 27-year-old, who has scored six goals in 21 appearances, continued: “I am really happy. This is what I have wanted for a long time.
"Being out for so long this season, I have been anxious to see where I would be next year, but this is where I want to be.
"Sometimes, when you are in a team, you just feel a connection, and feel like it is where you are supposed to be. I definitely feel that here. Everything is telling me to be here.
"There has been a real positive feeling in the past few games of the season since I have come back from injury. We want it to continue into next season, and hopefully that will be the one.”
While the future of Angol has been resolved, a host of other City players see their deals expire in June.
Richard O'Donnell, Paudie O'Connor, Callum Cooke, Matty Foulds, Charles Vernam, Gareth Evans, Elliot Watt, Theo Robinson, Levi Sutton, Luke Hendrie and Caolan Lavery are out of contract shortly.
Loanees Tom Elliott, Jamie Walker, Dion Pereira, Nathan Delfouneso, Matty Daly and Alex Bass will leave the club at the end of the season, with their commitments ending after Saturday's home game with Carlisle United.