Financial terms of the deal were not disclosed by the Ducks but the 42-year-old Selanne is expected to make $4.5 million, according to multiple media reports.
"I still feel I can play at a high level," Selanne said in a report on the team's website. "As I always say, this is my happy place and I can't wait to get back on the ice in front of our great fans."
Selanne, who was voted the league's top rookie after scoring 76 goals in the 1992-93 campaign, has been one of the NHL's most consistent snipers and has scored at least 22 goals in all but two of his seasons.
He led Anaheim with 66 points (26 goals, 40 assists) last season while playing in all 82 games. Selanne has 1,406 career points and is 12th on the NHL's all-time list with 663 goals.
Selanne, one of just three European-born players to record more than 1,400 NHL points, also helped the Ducks to a maiden Stanley Cup championship in 2007 and represented Finland at five Olympics, winning a silver and two bronze medals.