The news completed the team's race line-up and marked a return for Grosjean to the starting grid that he left at the end of 2009 after seven grands prix.
It also left Russian Vitaly Petrov, who competed for the team this year along with Brazilian Bruno Senna, looking for a seat with only a few options available.
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"I am thrilled to be one of the team's race drivers in 2012," Grosjean said in a statement.
"There's a big grin on my face at the prospect of getting behind the wheel of next year's car, and I feel very privileged to be given this opportunity."
Petrov, who had raced for the team for the past two years as Russia's first F1 driver, had a contract for 2012 but his manager had made clear in recent days that it was not a watertight agreement.
Renault boss Eric Boullier thanked Petrov and Senna for their contributions and wished them well while focusing on Grosjean's potential.
"Romain has shown a lot of maturity in the past 12 months both through his GP2 Series victory and his development as third driver with us," he said.
"We were impressed when he drove for us in the first practice sessions in Abu Dhabi and Brazil. We are confident that drafting him in to one of our driver's seats will help us in our rebuilding process."
Grosjean raced for Renault in 2009 as a mid-season replacement for Brazilian Nelson Piquet junior and won the GP2 support series this year.
Raikkonen, the 2007 world champion with Ferrari, will be making his comeback after two years in the world rally championship and brief interlude in NASCAR.
"Announcing Romain as our race driver alongside Kimi is great news and will help us achieve our aims of getting back to the very top," said Gerard Lopez, chairman of the team's owners Genii Capital.
Grosjean said he was a much more complete driver now.
"I feel that my successful season in GP2 Series has helped me mature a lot," he said. "Returning to Enstone (the team headquarters) as a race driver feels like coming home. I will not disappoint."
