The quarterback had been expected to be released, having thrown 10 interceptions in 10 games in 2012 as well as missing six weeks with a concussion, losing his starting place to Nick Foles.
Head coach Chip Kelly told reporters: "The one thing that attracted me to Michael after visiting with him, he's a competitor. I don't think Michael is afraid of anything. He wants competition. I've seen Nick up close and personal and I think Nick wants it too.
"It's our job as coaches to put him in a situation where he can get the ball out quick. We do have some playmakers on the offensive side of the ball who are going to flourish when they get the ball in their hands. That's on us as coaches. A lot of times that's not on the quarterback."
Vick added through his Twitter account: "I am grateful and proud to be a Philadelphia Eagle. My heart is in Philly and this community is important to me."
The Eagles finished the 2012 season bottom in the NFC East with four wins and 12 losses.