The 35-year-old, who last played for the county in 2011, will be available for the whole competition. Afridi has played 27 Tests, 398 one-day internationals and 90 Twenty20 matches for Pakistan.
“He was very popular during his last stay and it is exciting to have him coming back again,” Hampshire chairman Rod Bransgrove told BBC Radio Solent.
“He was very keen to come back and made it clear he’d love to have another stint here. He lifts people around him so it will be exciting for us.”
Afridi, who appeared for Northants last season, has captained Pakistan in all three formats of the game and currently skippers the T20 side.
He is the all-time leading wicket-taker in T20 internationals, with 91 at an average of 23.90 and an economy rate of 6.60 runs an over.
“The T20 is going to get more competitive this year as everybody is vying for position and signing big names,” Bransgrove added. “I think we will be well structured and well prepared to fight hard in the tournament.”
Hampshire have already signed South Africa all-rounder Ryan McLaren as their main overseas player for the 2016 season.