The confirmation came a day after Grosjean won the Race of Champions event in Bangkok, beating Red Bull's triple champion Sebastian Vettel and seven-times world champion Michael Schumacher along the way.
"Romain is a great talent and we are pleased that he is continuing with us for a second season," said team principal Eric Boullier in a statement.
"With the continuity of two exceptional drivers like Romain and Kimi we are well placed to build on our strong 2012 with even better results in the year ahead."
Lotus finished the 2012 season as the fourth-placed team overall, with Grosjean taking three podium placings and ending the championship eighth overall, while Raikkonen was third in his comeback year.
The decision to stick with Grosjean was expected, although the Frenchman had an erratic season that included a one-race ban for causing a collision in Belgium that put Ferrari's Fernando Alonso out of the race.
Alonso, who was lucky not to be hit on the head by Grosjean's flying car, lost the title battle to Vettel by just three points - a fraction of those he could have expected to score at Spa.
"It's fantastic for me to be continuing with Lotus," said Grosjean, whose starting collisions led to Australian Mark Webber angrily dubbing him a "first-lap nutcase".
"I'm really looking forward to rewarding their faith when we take to the track in Australia. I learnt a lot in my first full season in Formula One and my aim is to put these lessons into practice with stronger and more consistent performance on track next year," he added.
The Lotus seat was the most desirable that had yet to be filled and leaves just three vacancies on the 2013 starting grid - one each at Force India, Caterham and Marussia.
The seat left vacant at Force India by Germany's Nico Hulkenberg, who has moved to Sauber, is by far the most coveted with Germany's Adrian Sutil a frontrunner to return to his former team.
Sutil left Formula One at the end of last year and was handed an 18-month suspended sentence in February for grievous bodily harm resulting from a nightclub incident after the 2011 Chinese Grand Prix in Shanghai.
The German, who was a commentator for German television at the Race of Champions, assured BBC radio that his conviction would not be a barrier to his return.
"We checked all the countries and there is no problem for me to travel," he said when asked about some countries on the calendar having visa restrictions on those with criminal records. "All my problems last winter are solved.
"I'm ready for a new beginning," added Sutil.
Britain's Max Chilton, 21, is seen as Marussia's likely choice to partner Germany's Timo Glock, who is confirmed for 2013, while Russian Vitaly Petrov has been tipped to stay at Caterham.
Brazilian Bruno Senna, Japan's Kamui Kobayashi and Finland's Heikki Kovalainen are all 2012 regulars still looking for race seats for 2013.
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