The 34-year-old American agreed a deal to keep him at Ewood Park until 2008 after impressing for Rovers over the past six seasons.
Since retiring from international football Friedel believes he is in the best form of his career with Hughes comparing his veteran keeper to former team-mates Neville Southall and Schmeichel.
"We’re delighted because I think Brad is one of the top keepers in the Premier League Hughes said.
"If his contract ran out lots top clubs would want him so we’re delighted it has been resolved.
"I’ve played with the likes of Schmeichel and big Nev. Brad is certainly up there with the very best of them.
"He’s a great athlete in pre-season he was the guy at the front of the pack - he was a credit to himself."
Friedel arrived at Blackburn in 2000 after spells at Liverpool Columbus and Galatasaray and has played a vital role in getting Rovers promoted and into Europe.
In Hughes’ first full season since taking over from Graeme Souness Friedel is targeting a return to European competition eventually.
"Although this club is perceived as smaller it is set up for success he said. "It’s now up to us as staff and players to get us back in Europe which is what we all want to do. It’s a massive challenge but it’s one we’ll relish."
He added: "I know I’m going to look after myself. After retiring from international football I’ve finished a lot of the long-haul flights the games put a lot of mental stress on you.
"I feel fantastic better than I did five years ago. I feel fresher and more fit in the legs because I’m playing less games.
"I was travelling eight to 10 hours after a match on a Wednesday it’s a little taxing.
"I'm very pleased to stay on and get a three-year deal especially at my age.
"I think I still have four to five good years at the top level so I was very comfortable and confident to sign.
"I think I can give the club three very good years it's my sixth season and I have a very good relationship with the fans and the staff."