Growing up, Naley had been told that his paternal grandfather was of Afghan descent. This was to explain away the fact that some family members had darker than usual complexions. In recent years it has come to light that in fact, Naley's grandfather, Charles Gordon Naley, was Aboriginal. Charles had served with the Australian army at Gallipoli. Wounded and shipped to England for treatment, Charles eventually married his English nurse, Cecilia.
Coming from Sacred Heart College, Naley joined the junior grades of South Adelaide, going on to make his league debut in 1980. He was a member of the State Youth Team that same year. While at South Adelaide, he earned All Australian selection for his performances in the 1986 and 1987 Interstate Carnivals, the latter also saw him win the Tassie Medal. He represented his state from 1981 to 1989, and again in 1991 and 1992.
Naley moved from the state based South Australian National Football League to Victorian based VFL when he joined Carlton in 1987. He was a regular member of the side all season, finishing the year with a premiership. He also received 12 Brownlow Medal votes for the year, finishing equal 10th. In 1990 he suffered from hamstring problems and only managed 8 games, as a result he decided to return to his original club South Adelaide, winning the 1991 Magarey Medal before going on to retire in 1993.