Kotsay was eligible for free agency at the end of the season. The 36-year-old went into Sunday's game against the Pittsburgh Pirates hitting .275 with one home run and nine RBIs in 55 games.
Kotsay has made 15 starts in left field, five in right field and two at first base.
San Diego general manager Josh Byrnes says Kotsay provides versatility, a very good late-game at-bat and "invaluable leadership."
Kotsay is in his 16th season and has also played with Miami, Oakland, Atlanta, Boston, the Chicago White Sox and Milwaukee. He is a .278 lifetime hitter with 125 homers.