Troisi, who made 29 appearances and scored 12 goals for Victory in 2013/14, is back in Australia after stints in China, Saudi Arabia and Belgium.
Most recently, the 28-year-old Caltex Socceroo played for Liaoning Whowin in the Chinese Super League, where he cut short his contract to reunite with Victory.
“James is a quality player and individual, and we’re thrilled to welcome him back to Melbourne Victory,” said head coach Kevin Muscat.
“We’ve seen the level of football he has produced in the A-League and it’ll be exciting to see him back in our colours this season.
“James has built a strong resume playing at clubs all over the world, which has made him a more accomplished player, and we’re looking forward to him applying that experience at Victory.”
During his 2013/14 season at Victory, Troisi started in all but two matches, was named Players’ Player of the Season and scored three goals in the AFC Champions League.