The Northern Ireland international ended his six-year association with the Cottagers in 2013 having played 165 times for the club, which included a start in the 2010 Europa League final.
Since then Baird has played for Reading, Burnley and West Brom before joining Derby in 2015.
He told Fulham's official club website: "When the opportunity arose I had no doubt in my mind that I wanted to come and be part of this again.
"I'm looking forward to playing in front of the fans again
They were fantastic to me over the six years that I was here previously."
Source : PA
Source: PA