Renshaw, 27, is in the squad for the first seven County Championship matches.
Renshaw has played 14 Tests for Australia. Somerset said he would add experience to the side.
During his previous stints with the club, Renshaw played in 14 County Championship matches, scoring 1,133 runs at an average of 49.26, with a highest score of 146.
He scored five centuries in red ball cricket, including one against Yorkshire in 2018.
The Director of Cricket, Andy Hurry, described Renshaw as a 'quality performer'.
"He has proved that during his previous spells with us as well as domestically in Australia. Everyone can see he is on the cusp of further international recognition."
Somerset's County Championship campaign begins on 5 April when they face Kent at the St Lawrence Ground in Canterbury.