I think it's a good move, but I know others will disagree. Pudge came here when nobody else would. Illitch is paying off that loyalty. I have no problem with it. ESPN - Tigers decide to bring back Pudge for 2008 season - MLB
It's not just that. There are no viable alternatives at this point. Oh, and also this was already posted in a different thread.
We have a realistic shot at a championship next year. Letting Pudge go would seriously undermine that (by not having a great catcher to manage our pitchers). Overpaying him for a year is our best option right now. Besides that, he is an OK hitter, and is a leader.