After he joined the exodus of big-name stars from the club in 2012, he spent a year with Besiktas in Turkey before joining Hull.
McGregor on Twitter spoke of his delight at moving back to Rangers.
"He is vastly experienced goalkeeper who we feel can add to the options available to us now", Gerrard told the club website. It's obvious that he is below the required level in the Premier League and it was hard to judge how he would have done in the club's promotion winning campaign past year as he underwent heart surgery and missed a lot of action.
"He is a Rangers supporter who rose through the ranks here, so having someone with such a depth of feeling towards the club is another great asset to the squad". Hull finished 18th in the Championship this season and while manager Nigel Adkins wanted McGregor to stay, the keeper rejected the new terms offered and became a free agent.
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They're so good that they can quickly overcome any odds, whether it's blowing open a close game or erasing a lead in minutes . Sure, they are technically subjective rankings, but it'd be hard to make a case against that order.
McGregor will now battle with Wes Foderingham and Jak Alnwick to become the number 1 between the sticks for the Scottish giants.
McGregor, who has 38 worldwide caps, moved to Hull after a year in the Turkish top flight.
McGregor said: "I can't keep the smile off my face". It does. I started training here when I was probably 12.
The 31-year-old is now thought to be interested in reuniting with Gerrard at Ibrox, but with Lazio reluctant to sell, it may be hard for Rangers to secure his signature this summer.
The goalkeeper won eleven major titles with Rangers including league titles in 2009, 2010 and 2011. We need to win games, no matter who you are playing.
"We'll see, no final decisions have been made".