Vettel has lost his Ferrari seat for next year after six seasons with the Scuderia, the last of which is proving tough in an underperforming car.
But after initially considering retirement, the four-time world champion is replacing Sergio Perez at Racing Point, who will become Aston Martin in 2021.
Renault DP World F1 Team driver Ricciardo is delighted to see Vettel, a former team-mate of his at Red Bull, continue in the sport.
"I really feel for Perez because he's performed well enough to keep the seat, but also the sport is good with Seb," Ricciardo told Stats Perform News ahead of the Russian Grand Prix.
"Seb is one of these guys that is probably the only driver on the grid who doesn't have social media. He's one of the most successful and wealthy drivers of our generation, yet you probably see him on the street and you wouldn't know it.
"He's unique. He lives and breathes the sport, he loves it, probably more than anyone actually and I'm happy that he stays on.
"I think it's time for a change for him and I think this will be really good for his career, maybe the last phase of his career."
Two-time champion Fernando Alonso will also be on the grid next year after two seasons away.
The Spaniard returns to Renault DP World F1 Team - to be renamed Alpine F1 - where he won his titles, replacing Ricciardo.
The Australian, who is joining McLaren, said: "I always wondered if [Alonso] would come back.
"With all the other racing he's been doing, I think he misses it too much. So for him to come back with Renault, it's cool for the sport.
"He's a big name. There are a lot of the big names maybe getting to the end of their careers. We don't know how long they’re going to hang around, so it's nice to have another one back."