The deal is reportedly worth $15 million.
The star midfielder is coming off his best season, helping the Galaxy win their first MLS cup since 2005.
"This was an important decision for me," Beckham said in a statement provided to The Associated Press. "I had many offers from clubs from around the world, however, I'm still passionate about playing in America and winning trophies with the Galaxy."
Beckham's five-year contract with the Galaxy ended in November. He and wife Victoria, a former member of the "Spice Girls," moved to California in 2007 after he left Real Madrid.
The celebrity couple now have four children and decided during a Christmas break in England that they did not want to move back to Europe permanently.
"I am thrilled that David has chosen to rejoin the Galaxy, especially as he had numerous options where he could continue his career," Galaxy coach Bruce Arena said. "I felt that he was one of the best players in all of MLS last season and we could not have achieved the success that we did without him. We look forward to trying to replicate that success this season with David once again in a Galaxy uniform."
The Associated Press contributed to this report.