The Leicester East MP had been challenged to the post by fellow Labour MP Fionna McTaggert but the MPs decided to keep him in the post, by 412 votes to 192.
"I am grateful for the support of colleagues, and I look forward to working with the new committee when its members are elected in two weeks' time on the important issues within the Home Affairs Select Committee portfolio, especially counter terrorism," 58-year-old Vaz said in a statement here today.
Over the years, the Home Affairs Select Committee has emerged as more powerful than a shadow Cabinet minister or even a junior minister.
His re-election comes amid a major row in India involving him and External Affairs Minister Sushma Swaraj over helping controversial Indian Premier League founder Lalit Modi to obtain British travel documents to visit Portugal, purportedly for his wife's cancer treatment in June last year.
The Goan-origin MP had denied any wrongdoing in the matter.
According to British media which quoted leaked emails, Vaz cited Swaraj's name to put pressure on UK's top immigration official to grant the travel papers to Modi, who subsequently got the documents in less than 24 hours.
It was a double victory for Vaz this week as he was also elected unanimously as chair of the UK's All Party Parliamentary Group (APPG) on Diabetes.
Vaz has type 2 diabetes and has been an ardent campaigner on the issue.
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