"He's a professional hitter, a guy that kind of really makes our offense go," Padres general manager Kevin Towers told the San Diego Union-Tribune on Friday. "Those guys are hard to find out there, even in the free-agent market. That was a move that we felt we needed to make."
Giles, who turns 38 in January, will be back for his seventh season with his hometown Padres. The team had a choice between the option or a $3 million buyout.
"I'm happy," Giles told the Union-Tribune on Friday, adding he believes the club can contend in the NL West in 2009 despite finishing last in the division.
"I know we lost 99 games last season, but if we can add to our bench and our bullpen, we'll be OK," Giles told the newspaper. "That's how we've won here. Who's to say 84, 85 games won't win the division again? It's a young division, and with youth comes inconsistency.
"I wanted to stay in San Diego and have an opportunity to win."
Giles hit .306 with 40 doubles and 12 homers, along with 63 RBIs and 87 walks.
A career .294 hitter in parts of 14 big league seasons with the Cleveland Indians, Pittsburgh Pirates and Padres, Giles told the Union-Tribune he vetoed a trade to Boston in August because he anticipated not playing and then being traded this offseason.
"Playing time going down was the first thing that concerned me," Giles told the newspaper. "I would have been on the bench for three or four weeks. I wanted to play."
Giles now can veto a trade to any of the other 29 clubs, but if the Padres are out of the playoff race late next season, he told the Union-Tribune he'd be open to being dealt.
Information from The Associated Press was used in this report.