The alarm was raised at 19:30 BST on Monday after he was spotted near a wind farm off the coast of Redcar.
The Redcar RNLI lifeboat was launched and found the man attempting to paddle against the wind and tide but drifting further off shore.
Dave Cocks, from Redcar RNLI, said the man was dressed only in a hoodie and shorts
"This is a good example of the types of incident we repeatedly warn people about," Mr Cocks said.
"If the alarm hadn't been raised there was every likelihood he'd have drifted out of sight of land and we could well have been bringing a dead body back."
The man was given sea safety advice after being taken back to dry land.
A man who drifted a mile out to sea in a toy dinghy he barely fitted into has been rescued.