The Panthers officially announced Johnson's one-year contract Wednesday.
"Once you put all that energy into it, I feel like I would have been wasting all that work had I gone somewhere else for some dollars. I'd rather be happy doing what I'm doing around people that I know, and I'm comfortable with. I can't wait to get back to work," Johnson said in a statement released by the team.
Sources told ESPN that the deal is worth $3 million and that Johnson turned down offers worth $6 million per year from other teams to remain with the Panthers.
"What this deal signifies is Charles is a man of his word and in his heart he bleeds Carolina blue. The entire Panthers family is very happy that Charles will be able to continue his career here," Panthers general manager Dave Gettleman said in a statement.
Johnson, who will turn 30 this offseason, was released March 3 after nine seasons with the Panthers, with whom he ranks second all-time in sacks (63.5) and forced fumbles (17).
Johnson told ESPN's Josina Anderson that he almost signed with the Giants.
"I came pretty close, but ultimately my heart is in Carolina," Johnson said. "It's not about the money. Carolina is home, and I wouldn't have been happy if I went somewhere else.
"The Giants are a first-class organization, but now I have one more year to get back where I want to be, at home."
Johnson missed seven games last season because of a hamstring injury. After finishing the regular season with one sack, he had three more during the Panthers' run to Super Bowl 50.
A team captain with Carolina, Johnson had one year remaining on the six-year, $76 million deal given to him in 2011, which he had already restructured twice. By cutting him this offseason, the team cleared $11 million in cap space.
Johnson recorded at least nine sacks in four consecutive seasons, from 2010 to '13, a first with the Panthers. Drafted in the third round in 2007, he played in 118 regular-season games for the Panthers, which ranks third in franchise history for a defensive lineman.
ESPN's Adam Schefter and David Newton contributed to this report.