The blast in Kadhimiyah, which is home to a revered Shia's shrine, also wounded at least 43 people.
A police colonel said the bomber struck inside a restaurant at Kadhimiyah's Aden Square, while interior ministry and medical officials said the attack targeted the crowded square.
It is the second suicide bombing to hit the capital in three days. On Saturday, an attack inside a restaurant in the Baghdad Jadida area killed at least 23 people.
There was no immediate claim of responsibility for the Monday attack, but suicide bombings are a tactic almost exclusively employed by Sunnis in Iraq, including militants of the Islamic State (IS) group.
IS spearheaded an offensive that swept through large areas north and west of Baghdad last June, and Iraqi forces are battling to regain ground with support from US-led air strikes.
A roadside bomb also exploded in a commercial district in the Shia-majority Husseiniyah area near Baghdad on Monday, killing at least one person and wounding at least seven.
Militants often target crowded places like restaurants, shops and markets to maximise casualties.
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