The midfield star’s contract had run out at the end of last season.
But the 25-year-old was persuaded to stay and has put pen to paper on a new deal which will see him stay at Stark’s Park for another year.
Spencer said he was happy to put and end to speculation about his future and sign up for his third season with Raith.
"It was something I was quite calm about because I knew I wanted to be here,” he told Raith TV.
"It’s good to get it done and get ready to get going. I’ve got a lot of good memories so I’m looking forward to making some new ones.”
Spencer says last season’s success was a key part in his decision to commit to the club.
"It’s credit to the gaffer [manager John McGlynn] and Smudger [assistant boss Paul Smith] for putting the team together and the way we play.
"It’s all down to them and getting results is something they’ve always been keen on.
"Now it’s about building on that this year.”