Grayson arrived at Elland Road midway through the season, steering the club to the League One play-offs.
But a 2-1 aggregate defeat to Millwall means it is the Lions who will line up against Scunthorpe in Sunday's final at Wembley rather than Leeds.
"We had a traumatic season because for the second one in succession we had a change of manager which is always unsettling," Bates told the club's official website.
"But next season we start properly. We have a good manager, a good playing staff which will be strengthened and great fans."
Carlisle United are hoping to complete the signing of left-back Ian Harte on a permanent basis.
Harte, 31, made three appearances for the Cumbrians before breaking his hand after joining the club on a short-term basis towards the end of the season.
Leicester City's chairman Milan Mancaric has said the club are interested in signing Bristol City's goalkeeper Chris Weale.
Weale, 27, is out of contract at Ashton Gate and has become a target for the League One champions.
Tranmere Rovers have released four players as they look to rebuild for next season - after going so close to reaching the play-offs this time round.
The Wirral side were on course to finish sixth as they lead 1-0 at Scunthorpe on the final day of the season, but Cliff Byrne's dramatic late equaliser put the Iron through at their expense.
Edrissa Sonko, Adnan Ahmed, Luke Waterfall and Danny Holmes have all been shown the door. New deals have been offered to Antony Kay, Steve Jennings, Ben Chorley, Danny Coyne, Charlie Barnett and Ian Moore.
The Brighton & Hove Albion manager Russell Slade has rubbished reports suggesting
The Shrewsbury Town defender
Jackson tore a leg muscle in February and has been unable to prove his fitness ahead of the Wembley date.
Wycombe Wanderers, promoted to League One after finishing third in League Two, have handed contract extensions to the defenders