League sources confirmed to ESPN NFL Insider Adam Schefter that Bennett signed a four-year, $28.5 million deal, with $16 million guaranteed.
Bennett will make $10 million in the first year, $6 million in the second year, $5 million in the third year and $7.5 million in the final year.
Two teams offered more, sources told Schefter, but Bennett opted to stay in Seattle.
The Seahawks announced the deal via Twitter on Monday, one day before the start of free agency.
Bennett also took to Twitter, praising Seahawks fans.
I m back I m happy super bow champ .The 12th man is the biggest reason I came back the best fan- Michael Bennett (@mosesbread72) March 10, 2014
Bennett was Seattle's best defensive lineman in 2013 after signing a one-year deal worth $4.8 million. He played his first four seasons with Tampa Bay after the Seahawks released him as an undrafted rookie in 2009.
"I mean, I always bet on myself and believe in myself and my talents, and being able to come here and get a chance to play with these guys, I knew it was going to be special," Bennett said on Feb. 5.
The 6-foot-4 Bennett was everything and more the Seahawks hoped he would be when they brought him back for the 2013 season. He had 8.5 sacks in the regular season along with one forced fumble and one fumble recovery, which he returned 22 yards for a touchdown.
Bennett's versatility and quickness were major assets for Seattle, and he played both end and tackle.
He had six tackles, a forced fumble, a fumble recovery and a half-sack in the Seahawks' divisional-round playoff game against New Orleans. He kept it up in the NFC Championship Game, posting a sack and recovering a fumble that he returned 17 yards to San Francisco's 6-yard line.
From the time Seattle was done celebrating its first Super Bowl championship, Bennett indicated a desire to stay with the Seahawks -- but for the right price. He knew this was his chance to cash in on a big contract as an unrestricted free agent. It's why he waited until after teams could begin speaking with agents regarding unrestricted free agents and seeing what was available on the market before deciding on a return to Seattle.
"I love the team, I love my teammates. I mean, Pete [Carroll] does a great job of letting us play, so I want to be a part of that," Bennett said after the team's victory parade. "I know we can go back and win the Super Bowl again with all of these guys, but it's a business. But I definitely want to be back."
Carroll and general manager John Schneider have been steadfast that their top priorities in free agency were retaining players and not making big splashes by signing others. Bennett was at the top of the list, with receiver Golden Tate not far behind.
"We want this team together, we want to see if we can keep this team together," Carroll said after the Super Bowl. "Every decision is difficult that we have to face, and guys that are at the end of their contracts, those are big issues for us. We love the guys, we love what they do and what they bring, and we'd like to keep this together as best as we can."
Information from ESPN.com Seahawks reporter Terry Blount and The Associated Press was used in this report.