The Guyanese left-hander, struck 819 runs at an average of over 50 in last year's County Championship, including three centuries as Lancashire finished second in Division One, the club's highest position since the 2011 title triumph.
"The Club is extremely ambitious and there is a group of hugely talented young cricketers in the squad. I've really enjoyed playing my part both on the field scoring as many runs as possible, but also as a mentor to some of our younger players," he said.
"Hopefully I can continue to pass on some of my knowledge and experience to them," Chanderpaul told the club's official website (www.lccc.co.uk).
Chanderpaul, who previously played with Durham, Warwickshire and Derbyshire, as well as enjoying an earlier spell with Lancashire in 2010, retired from international cricket in 2016 with an average of 51.37. His total of 11,867 test runs is the seventh highest of all-time.
(Reporting by Simon Evans; Editing by Christian Radnedge)
