Terms of the deal were not immediately disclosed, but in the past few seasons he has typically signed a minimum salary benefit contract.
This year, when he returns, he will have competition, as Detroit signed long-snapper James Fisher to a futures contract. Muhlbach had said after last season that he needed to go home and discuss with family what he wanted to do before deciding to return for another year.
Muhlbach, who turns 39 in August, has appeared in 244 career games -- all with Detroit -- and has not missed a game since the 2009 season.
He is the last Lions player still with the franchise from the team's winless 2008 season and the only player left from the Matt Millen era.
Muhlbach went to the Pro Bowl twice as a long-snapper, in 2012 and 2018, and is tied for No. 56 all-time in games played in NFL history along with Ray Donaldson, Chris Gardocki, Ricky Proehl, Terrell Suggs and Matt Turk. Of those players, Muhlbach is the only one to be with one team his entire career.