Christian, 33, captained the side during this year's tournament and will be one of their two overseas players for the competition in 2017.
He averaged 41, with a strike-rate of 159.51, as Notts Outlaws won nine matches in a row in 2016.
"Dan is an explosive player who hits the ball miles and played really well for us," said head coach Peter Moores.
"He's also been around the T20 scene and around cricket for a long time. He brings all that experience to us, as well as a real calmness under pressure."
Christian has played 174 Twenty20 matches during his career, scoring 2,549 runs and taking 130 wickets.
He made three half-centuries for Notts last summer and equalled Alex Hales' record for the county's fastest half-century in T20 cricket by reaching fifty off 16 balls against Leicestershire.
"Anybody who has met Dan will know he's a brilliant team-man. He gives everything and expects the same from his team-mates," Moores added.
"He likes to get on the front foot, to be aggressive and to play attacking cricket, which is exactly what we want in that form of the game."
Australia all-rounder Dan Christian will return to Nottinghamshire for next summer's T20 Blast.