The team made the announcement Monday night.
Escobar batted .304 with five homers and 39 RBIs over 132 games in his first season with the Angels, his fifth big league club. The Angels exercised their option on the 34-year-old Cuban infielder instead of paying a $1 million buyout.
Los Angeles also designated reliever Cory Rasmus for assignment and activated five key pitchers from the 60-day disabled list: right-handed starters Garrett Richards, Matt Shoemaker and Nick Tropeano, left-hander Andrew Heaney and closer Huston Street.
Rasmus repeatedly struggled with injuries while going 0-2 with a 5.84 ERA in 19 games last season, his fourth with the Angels.
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