The Rangers confirmed the signing after Padilla passed his physical, keeping the 29-year-old Nicaragua native in Texas.
"It's exciting to have Vicente back in the fold for the next two years," Texas general manager Jon Daniels said.
"He was a horse for us (this) year and demonstrated he can pitch and win in our park."
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The contract also contains a $12 million option for a fourth year.
Padilla went 15-10 with a 4.50 ERA while pitching 200 innings for the Rangers last season. He is 66-61 over his eight-season career with Arizona, Philadelphia and the Rangers.
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