As is often the case in the Psalms, we again have two parallel sentences here. The Lord did not only save the king—from Saul and the Philistines—he showers him with blessings all his life. The Lord makes him happy by being close to him. His faithful presence is cause for joy. We hear in this the glorious name of YHWH, I am who I am
; as well as Immanuel.
God is close to his people, in this case close to the king of the covenant people. That makes the king happy, just like in Psalm 21:1.
6 For you make him most blessed forever; you make him glad with the joy of your presence.