The Scotland internationalist, who became a favourite at Fir Park during his first spell with the Steelmen, will join Stuart McCall's ranks until the end of the season as they aim to finish second in the SPL.
After leaving the Well back in 2003 in a £1.25million move to Everton, McFadden has gone on to play for Birmingham City, Everton again, before latterly appearing sparingly for Martin O'Neill's Sunderland.
Following his release at the Stadium of Light, the 29-year-old has been training with the Motherwell squad, and was seen in the stand during their 3-0 victory over Inverness Caley Thistle in the SPL on Saturday.
And after days of speculation, the club tonight confirmed the forward would once again wear the claret and amber of Fir Park side.
He told MFC TV: "I am really pleased to be back here at Motherwell."
For full details pick up a copy of tomorrow's Evening Times or go online at www.eveningtimes.co.uk