The former Mumbai FC player was used as a right-back for most parts of the last season which saw him in action for 1179 minutes.
The 23-year-old Gurdaspur academy product is a highly rated defensive midfielder known for his hard tackling and serious defending and does not hesitate on having a try at the opponents goal.
"Sehnaj was an integral part of our team last year. His versatility was one of the major reasons why we have decided to retain him. (Am) looking forward to him being a mainstay in the team for years to come," said Mumbai City FC CEO, Indranil Das Blah.