The 39-year-old was traded to the Yankees in July after playing his first 12 Major League seasons with the Seattle Mariners. He thrived in New York, hitting .322 in 67 regular season games.
A 10-times All Star and former league MVP, Suzuki has 2,606 career hits.
"The Yankees are the kind of team that I always envisioned being a part of," Suzuki said in a statement. "Everyone in the world of competition has a strong desire to win, but the Yankees also have an atmosphere where losing is not an option.
"I believe the Yankees organization appreciates that there is a difference between a 39-year-old who has played relying only on talent, and a 39-year-old who has practiced, prepared meticulously and thought carefully about their craft through the experience they have gained."
News of the deal comes after reports Suzuki was growing impatient with the pace of negotiations, though Yankees General Manager Brian Cashman explained the team had prioritized securing their pitching staff before dealing with the other positions.
(Writing by Jahmal Corner in Los Angeles; Additional reporting by Alastair Himmer in Tokyo; Editing by Peter Rutherford)