Although financial details were not disclosed by the Giants, local media estimate the deal to be worth $22 million with an option to extend for the 2013 season.
"We're extremely excited to be able to re-sign Aubrey," Giants general manager Brian Sabean said in a statement.
"He was an integral part in the team's success last season, not only with his outstanding play in the field, but also providing a great clubhouse presence."
Initially signed by the Giants last season for just $3 million after they had failed to lure free agents Nick Johnson and Adam LaRoche, Huff swiftly became one of San Francisco's most valuable players.
A formidable presence in the middle of the batting order, the 33-year-old hit .290 with a team-high 26 home runs, 86 RBIs and 83 walks in 157 games.
In the postseason, he batted .268 with one homer and eight RBIs to help the Giants win the World Series for the first time in 56 years.
"I've been on five different teams," Huff said earlier this month. "I liked them, but I love this place. You'd be an idiot not to want to come back here."
(Writing by Mark Lamport-Stokes in Los Angeles; Editing by Julian Linden)