La Russa told a Monday news conference: "I'm thrilled be back. This is where I wanted to be and this is where they wanted me to be."
La Russa's future with the Cardinals was up in the air after the team fired General Manager Walt Jocketty, who was a good friend of La Russa's dating to the time they were both with the Oakland Athletics.
St. Louis is also coming off a disappointing 78-84 season in which the Cardinals finished third in the National League Central Division.
But the team and La Russa came to terms and he is to return for a 13th season of leading the Cardinals. La Russa, 1,055-887 in St. Louis, has more victories as than any other St. Louis manager. He has taken the team to seven playoff appearances, two National League pennants and the 2006 World Series title.
La Russa also managed the Chicago White Sox and Athletics. He is a four-time manager of the year award winner and is third on the all-time list for wins by a manager at 2,375 behind only Connie Mack (3,731) and John McGraw (2,763).