Duffy finished as the I-League's top scorer at the last edition with a tally of 14 goals and was adjudged the best foreign player of the league.
He netted on his I-League debut to secure a 1-0 win for the Greens against Goan rivals Churchill Brothers on the opening day and coincidentally scored against the same opposition on the final day of the league.
"Firstly, I'm delighted to be coming back, my family and myself are looking forward to getting back to Goa and getting started," an official release by Salgaocar FC quoted Duffy as saying after signing on the dotted line.
The player began his career as part of Ranger's youth set up and has donned the colours of Hull City, Swansea City and Bristol Rovers amongst others before moving to India to join Salgaocar FC last season.
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Duffy burst onto the scene by helping First Division side Falkirk gain promotion to the Scottish Premier League, finishing as the league's top scorer with 17 goals that year.
He achieved a personal milestone last season, having netted the 100th goal of his playing career in a 3-1 win over Shillong Lajong at home.
Having made strategic re-enforcements to the squad with smart signings of young and talented Indian players through the course of the last couple of months, coach Derrick Pereira has shifted his focus to the foreign recruits to complete his squad.
"We are delighted to have Duffy back with us for another season. Besides being instrumental in helping the team finish third last season with some important goals, it is his attitude on and off the pitch that has impressed me the most," the release quoted Pereira as saying.