I'd be keeping hoim too. We know theres a terrific footballer in there once his confidence is back. Perfect squad player for us imo.
The other, perhaps important point, is that he's been there and had a look at the grass on the other side. He knows what he's got here. So at 27 we're likely to get 3 or 4 of his peak years, without worrying if he's going to have his head turned.
If the finances are right, and his wages aren't too much of a problem, I'd definitely take him. We know he's good enough for a team chasing champions league places, and if we evolve further in the next 2 or 3 years so that he's only a bit-part player - so be it!