Pietersen, available for the entire duration of the cash-rich IPL after being shunned by England, was picked up by Delhi, the franchise he played for last year, for 90 million Indian rupees (881 thousand pounds) after an intense bidding war.
The Chennai, Hyderabad and Punjab franchises bid heavily for the 33-year-old, whose base price was 20 million Indian rupees (195,210 pounds) , but Delhi bagged his services after using their right to match the highest bid.
"Morning - so happy to be back with the Delhi family! Lovely start to the day," Pietersen, the former England captain, said on his Twitter account.
India's Yuvraj Singh drew the highest bid of 140 million Indian rupees (1.36 million pounds) in the morning session of the auction and was bought by the Vijay Mallya-owned Bangalore franchise.
(Reporting by Sudipto Ganguly; Editing by John O'Brien)
