Cruz, a 39-year-old designated hitter, was seen by players and staffers as having a positive influence on the clubhouse this season. He belted 41 home runs to become just the third player in team history to reach the 40-homer mark, joining Harmon Killebrew (seven times) and Brian Dozier (once).
Despite two stints on the injured list, Cruz, who made $14 million in 2019, also had 108 RBIs and a .311 batting average this season.
He became the 57th player in major league history to hit 400 career home runs. Cruz is also the 26th player in baseball history with four 40-home run seasons, as he also accomplished the feat from 2014 to 2016 with Baltimore and Seattle.
MLB Network first reported that the Twins were expected to pick up the option for next season.
The Associated Press contributed to this report.