Daly began his senior career in England, where he played for Stockport County and Hartlepool United; he also had loan spells with Bury and Grimsby Town. He moved to Scottish football in 2007, when he signed for Dundee United. He spent over six years at the club, eventually becoming club captain, and won the Scottish Cup in 2010. He signed for Rangers in 2013, winning the League One title in his first season. Released by Rangers in 2015, he ended his playing career with Raith Rovers, retiring in January 2016 to take up a coaching role with Hearts. He was twice included in the PFA Scotland Team of the Year awards, for the Scottish Premier League in 2012 and for League One in 2014. In international football, Daly represented the Republic of Ireland at all youth levels up to the under-21 team.