Mourinho coached Chelsea between 2004 and 2007, before being fired and going to Inter Milan, and then to Real Madrid.
“I am delighted to welcome José back to Chelsea. His continued success, drive and ambition made him the outstanding candidate,” said Chelsea chief executive Ron Gourlay.
“It is our aim to keep the club moving forward to achieve greater success in the future and José is our No1 choice as we believe he is the right manager to do just that. He was and remains a hugely popular figure at the club and everyone here looks forward to working with him again.”
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The reputation of the Premier League means it is the most popular and one of the most watched leagues in the world.
Five English clubs will compete in the last sixteen of the Champions League for the first time ever as Liverpool, Manchester United, Manchester City, Chelsea and Tottenham face some difficult away matches.