James Brandon, who was working for Britain's Sunday Telegraph newspaper, was handed over to the Basra office of Shia leader Muqtada al-Sadr.
"I'm grateful to the Mahdi Army and I'm in good health now," Brandon told reporters shortly after his release.
Brandon said he was treated roughly at first, but then the mood of his captors softened.
Al-Sadr's office were instrumental in securing his release.
Al-Sadr's al-Mahdi Army has been involved in a resistance battle against the US-led occupation in Najaf since 5 August.