The 34-year-old, with three A-international matches on his merit list, previously played for Degerfors between 2012 and 2015. He has also won the Swedish Championship gold with AIK in 2018 and won the Israeli league with Maccabi Haifa.
Since last summer, he has belonged to Greek Volos, where his contract expires at the end of June.
"Degerfors gave me the very first honest chance to become who I am today. It will be incredibly fun and exciting to be able to give back to all of you for the love I've received over the years", says Sundgren to Degerfors' website.
"I'm not coming home to jog through my last years, on the contrary, I'm back to give it my all".
The club's sports manager Patrik Werner is very pleased with the agreement, which extends from this summer over the 2027 season.
"Daniel is a super pro all the way to his fingertips and we will have great use of his qualities and leadership skills", says Werner.
