Sebastien Bourdais will race for the 2013 IndyCar championship with Dragon Racing.
The team said Friday it has signed a multi-year contract with the French driver.
"It's a privilege to have Seb once again piloting the No. 7," said team owner Jay Penske, who added the 2012 season "was a challenge for us on so many levels, but despite that, toward the end of last season we demonstrated that with the right equipment and strategy, Dragon Racing is a force to be reckoned with."
Bourdais ran 11 of 15 races with Dragon last year. The season was plagued with problems related to engine issues, in part because Dragon opened the year partnered with Lotus.
Penske threatened to sue to break his contract with Lotus, and the two-car team was released before the Indianapolis 500.
Dragon switched to Chevrolet, but there was only one engine for Bourdais and teammate Katherine Legge to share for the rest of the season.
Bourdais had a season-best finish of fourth at Mid-Ohio last season, and qualified third at Sonoma and Baltimore. His intention is to run the full 2013 season.
"To kick things off that early is a great boost for 2013 after all the obstacles we had to go through in 2012," Bourdais said. "With the stability of the staff, the sponsors and the experience we amassed this year, I am very confident we can achieve great results next season."