The club did not disclose the details of his contract.
Honda, 31, has 86 caps for Japan, scoring 36 goals, and is the only Japanese player to score in two separate World Cups, netting in the 2010 and 2014 tournaments.
He joined Milan in January 2014 for a reported 20 million euro ($22.8 million) fee from CSKA Moscow but could not halt the decline of the Italian giants, who finished outside the top five in each of his four seasons at the San Siro.
He admitted after his last game, a 2-1 defeat at Cagliari for which he was named club captain, that his time at Milan had been a disappointment.
He said: "Unfortunately, I could not play in the number 10 role as often as I would have liked but I never gave up and did the best I could. I approached every game and training session with all my passion."
(Reporting by Richard Martin; Editing by Keith Weir)
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