The 36-year-old, who was found by a reporter from Norway's TV2 channel, disappeared on January 7 2013 on a visit to Pakistan, leading to speculation he had been seized by Pakistan's intelligence services.
He told TV2 he had been sentenced to six years for violating the Frontier Crime law, which governs the country's tribal areas, but that he was refusing to seek assistance from Norwegian authorities.
"According to Sharia law, I can not receive help from infidels. Therefore, I have not called or sought to involve them," he told TV2.
Bhatti, who has Pakistani parents, was born and brought up in Oslo, where he joined the Young Guns gang in the early 1990s. He later became an extreme Islamist, and was jailed for his role in shots fired at an Oslo synagogue in 2006. He is considered one of the leading figures in the extreme Islamist group Ansar Al-Islam.