Goodwin links up with the Reds on a three-year deal after two seasons in the Saudi Pro League.
The 33-year-old winger was off-contract at now-relegated Al Wehda, having scored 12 goals and 10 assists in 49 appearances.
Wednesday's announcement comes after Adelaide United appointed Brazilian-born Airton Andrioli to replace Carl Veart as head coach earlier in the week.
Andrioli will be at the helm on a two-year deal, following the Reds' short-lived finals campaign.
Adelaide had snuck into the top six after Sydney FC fumbled their chance, before suffering an elimination final loss to Western United.
Goodwin says his return to Adelaide for a fourth stint was largely driven by "unfinished business", aiming to pick up where he left off in 2023.
He remains in hot form on the international stage, a key figure for the Socceroos as they prepare to face Japan in Perth on June 5 to seal their passage to next year's World Cup.
"I'm just really excited to be back home at the club I love the most. There's still unfinished business - I want to win another championship, and another Australia Cup here," Goodwin said in a club statement.
"Nothing means more to me than bringing success to Adelaide United.
"Playing in front of a packed-out Coopers Stadium has always meant the world to me, and I'll give everything I have to deliver silverware again."
Goodwin is one of Adelaide's most decorated players, having ended his most recent stint by winning the Johnny Warren medal for his 15-goal, 10-assist effort in 2022/23.
The crafty South Australian winger helped secure the club's 2016 maiden championship after arriving in 2014.
In his second stint in 2018, Goodwin's brace launched the Reds to a 2018 Australia Cup final win.
The club's all-time leading goalscorer, Goodwin has a total of 60 across 168 appearances.
Fringe Socceroos defender Alex Grant will stay at Sydney FC for two more seasons after arriving in January on a short-term deal.
Grant earned his maiden call-up to the national team at the age of 31 for this year's qualifiers against Indonesia and China in March.
He re-signs with Sydney after the departures of long-time goalkeeper Andrew Redmayne, Polish striker Patryk Klimala, academy graduates Max Burgess and Jaiden Kucharski, and Jaushua Sotirio.
Elsewhere, Newcastle Jets midfielder Callum Timmins has secured his own homecoming and will return to Perth Glory on a three-year deal.
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