The 30-year-old Brantley hit .299 with nine homers and 52 RBIs in 90 games this season. His strong first half netted him an All-Star spot but he went on the disabled list twice and had right ankle surgery on Oct. 18.
Brantley played only 11 games in 2016 because of a shoulder injury that required surgery.
Brantley's option price rose from $11 million because of his top-five MVP finish in 2014. He was third in the MVP voting that season after hitting .327 with 20 homers and 97 RBIs. He hit .310 with 15 homers and 84 RBIs in 2015.
If the option had been declined, the Indians would have paid Brantley a $1 million buyout.
"Going into the season, he had some shoulder issues that really didn't affect him a whole lot for the majority of the season. And he performed at an exceedingly high level in the first half and earned an All-Star berth based upon that performance," general manager Chris Antonetti said, according to ESPN.com. "And then with his ankle, he did have surgery on it. There's a high likelihood of success with the surgery that he had performed, so we're very optimistic that Michael will be able to contribute for a meaningful part of next year. And, as we've seen, when he's on the field, he's a very productive player, and we think there's a good chance that he'll be on the field for the majority of next year."
Cleveland also exercised a $3 million option on right-hander Josh Tomlin, who went 10-9 with a 4.98 ERA in 26 starts. He was 6-0 with a 3.11 ERA in his last 10 appearances of the season.
Tomlin, 33, would have been paid a $750,000 buyout if the option not been exercised.