Peralta and the Tigers agreed on an $11.25 million, two-year contract with a club option for 2013. The team announced Peralta's return Monday, less than three weeks after re-signing third baseman Brandon Inge for a similar price.
"I feel happy. I want to be with the Tigers," Peralta said. "Playing shortstop, for me, is my natural position. I feel really comfortable."
Peralta played shortstop for most of his career before becoming Cleveland's regular third baseman in 2009. Detroit acquired him in July, and he played 46 of his 57 games with the Tigers at shortstop.
Detroit declined Peralta's $7.25 million option last week, opting to pay a $250,000 buyout, but Tigers general manager Dave Dombrowski said then that the team was optimistic about reaching a new agreement.
The 28-year-old can provide good power for a middle infielder. He hit .249 with 15 home runs in 148 games last season for the Indians and Tigers and has surpassed 20 homers three times.
Defensively, the Tigers hope Peralta and the smooth-fielding Inge will complement each other well after playing together toward the end of last season.
"I think they're a good combination together," Dombrowski said. "We liked the way it looked."
Detroit will now try to add a big bat to the middle of its order, probably an outfielder or designated hitter. First baseman Miguel Cabrera hit 38 home runs last season, but Detroit was done in by injuries to Inge, Magglio Ordonez and Carlos Guillen.
Ordonez is recovering from right ankle surgery and played only 84 games. The Tigers weren't about to exercise his $15 million option, so he's a free agent. Detroit isn't bringing back Johnny Damon, so there's room in the lineup for another hitter.
Peralta's return could push Ramon Santiago into a utility role. Santiago started games at both middle infield spots last year and hit .263.
Guillen's role is also unclear after he went down with a left knee injury in August. He's played only 149 games the last two seasons, but if healthy he could fit in at second base or the outfield.
"First and foremost, we've got to get him healthy," Dombrowski said. "Where he plays, we'll just have to kind of wait and see."
Peralta gets $5.25 million next year and $5.5 million in 2012. The Tigers have a $6 million team option for 2013 with a $500,000 buyout.