Detroit announced the contract Thursday, saying the 33-year-old will report to major league spring training.
Mercer hit .270 for the Tigers last year with nine home runs and 22 RBI in 74 games. He spent the first seven seasons of his career with the Pittsburgh Pirates before signing with Detroit for 2019. He was limited last season by quadriceps problems.
The rebuilding Tigers added second baseman Jonathan Schoop and first baseman C.J. Cron this offseason. Niko Goodrum is an option at shortstop, but Mercer gives Detroit another veteran in the organization if needed.