"It's great to be coming back to Worcestershire for a third season and to link up with some old friends and faces in the dressing room, as well as some new ones," he said. "I kept a keen interest in how the Rapids did after I left, and it was awesome for the club to win the Blast in 2018 and come so close again the year after.
"They had reached a few quarter-finals before that, and to make that breakthrough was brilliant. Hopefully, I can help them get those successful times back.
"A few New Zealanders have played for Worcestershire since I left, like Martin Guptill and Ish Sodhi, and it will be great to have Michael Bracewell as a team-mate, someone who has already made his mark in international cricket and will be an asset next summer."
Worcestershire finished bottom of the North Group in last year's Blast, with just two wins from their 14 games, and saw captain Moeen Ali depart over the winter. Head coach, Alex Gidman, was also let go, with Alan Richardson taking charge.
Worcestershire's steering group chair, Paul Pridgeon, said: "Mitchell has shown his ability at international level and knows the club, and some of the players, from his previous spell. He ticks a lot of boxes. He gives us another option in the spin department, a facet of the game which has proved so key in T20 cricket, and can also strike a powerful ball with the bat.
"Mitchell said how keen he was to return to New Road for another spell, and it did not take long to get everything sorted. We believe signing him and Michael Bracewell will make us a stronger T20 side and back up our determination to dramatically improve on last season's performances in the T20."