Terms were not announced.
"Lamar has a tremendous work capacity and has proven to be a threat in our attack," sporting director Chris Henderson said in a club press release. "Lamar has grown up here in the Pacific Northwest and is a hometown favorite. He is a leader in our community and a great teammate."
Neagle set career highs in 2013 with 30 appearances, eight goals, four assists and 61 shots. He was a finalist for MLS Comeback Player of the Year and was named Sounders FC Humanitarian of the Year.
He was born in Tacoma, raised in Federal Way, and played at Thomas Jefferson High School before going on to San Diego State.
Neagle originally joined the Sounders in 2009 and became a contributor in 2011. He spent the 2012 season in Montreal before returning home this season.
The Sounders begin 2014 training camp at the end of this month.
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