Experienced Dixon, 29, has agreed a one-year contract which will see him remain at the club until the end of 2015.
That sees the ex-Hull FC player takes his Castleford career into a ninth season.
Powell said: “I’m delighted Kirk has agreed this.
“He is a pleasure to coach and works as hard, if not harder, than anyone on his individual game which makes him a role model for young players to aspire towards.
“His game has been excellent in my time at the club and I’m looking forward to an outstanding season from him.”
Dixon, who overcame a career-threatening blood clot in his calf five years ago, has scored 80 tries in 163 games for the club who start their Super League campaign at Bradford on Sunday.
He has also booted 336 goals and admits the decision to commit again was a “no-brainer.”
“I sat down with Daryl during the pre-season campaign and he said he’d like to keep me and I was more than happy to stay,” Dixon said.
“We’ve been able to get the deal sorted and I’m just looking forward to getting the season started.
“Daryl said he likes what I do and I’ve been here for a while now and from my point of view you can see that things are progressing and moving forwards so it was a pretty simple decision.
“We’re starting to get some good combinations out on the field and it’s a pleasure to be in the side.
“It’s got a real family atmosphere down here; the office staff mingle with the players, the players mingle with the fans. Playing in front of those supporters is a special thing and something I didn’t want to leave.”
Powell, meanwhile, has revealed one of his close-season signings is set to miss the opening month of the campaign.
Ex-Leeds Rhinos three-quarter Ashley Gibson suffered a medial knee ligament injury in the friendly against Dewsbury.