Horne, having switched from back-row to prop following his move from KR, scored nine tries in 23 games for York as they raced to the League 1 title.
The experienced former Huddersfield Giants player, 33, has now agreed a new one-year contract as they prepare for life in the Championship.
Knights head coach James Ford, who has now assembled a squad of 24 players, said: "I’m delighted Graeme is staying.
“He brought an immense amount of skill and intelligence to our middle unit.
“Graeme still has a huge appetite for rugby and is still keen to develop further.
"I was delighted by the impact Graeme had on a heap of the players at the club last year and I’m excited to see that again this season."
Horne follows on after York also completed a deal for ex-Sheffield Eagles prop Jack Blagbrough from Leigh Centurions.