The Royal Challengers Bangalore retained him for $2.67m (PKR 28 crore), which beat the $2.4m Chennai Super Kings paid for former capain MS Dhoni.
A total of 18 players have been retained by eight teams, and an auction will be held on 27 and 28 January for the other cricketers in the pool.
The IPL is one of the richest cricket tournaments in the world.
England all-rounder Ben Stokes became IPL’s most expensive foreign player when the Rising Pune Supergiant team bought him for £1.7m last year.
But he is back in the pool again as the Supergiants are not playing in the 2018 edition of the tournament.
The Board of Control for Cricket in India runs the tournament but the teams are privately owned.
The IPL sees fierce rivalry, often bringing international opponents into the same team.
The league started in 2008 and has seen a steady rise in viewership and popularity since then.