The Tigers, who do not have any other in-house closing options, decided to pick up Rodriguez's $6 million option instead of buying out the rest of his contract for $2 million.
Rodriguez, 34, appeared in 61 games this year after being obtained from the Milwaukee Brewers last November. He was 3-4 with 44 saves and a 3.24 ERA.
"We liked the job K-Rod did last season, and the numbers show he was a reliable closer for us," Tigers general manager Al Avila said in a statement released by the team. "He stabilizes the back end of our bullpen and provides veteran leadership to our younger bullpen arms."
Rodriguez ranked second in the American League in saves and posted the second most in Detroit history in a single season behind Jose Valverde's 49 in 2011.
He made his major league debut with the Los Angeles Angels in 2002 and has a 50-48 record with 430 saves, a 2.73 ERA and 1,119 strikeouts in 920 appearances for the New York Mets, Milwaukee, the Baltimore Orioles and Detroit.