The 60-year-old will remain with the struggling three-time Bundesliga champions until the end of the current campaign, having agreed terms a day after the resignation of Armin Veh.
"I'm very happy to be back," said Stevens at his presentation. "Stuttgart only contacted me yesterday, but I can hardly wait to work again [for this club]. I had some good experiences here last year which I hope we can repeat."
Stevens, whose decision to leave Stuttgart at the end of the 2013/14 campaign was based on his wish to take a sabbatical from the game, saved the Swabian club from relegation during a three-and-a-half month stint last season, leading the club to a 15th-place finish.
Bottom-of-the-table Stuttgart have only picked up nine points from 12 matches so far this term, winning two and drawing three. Their last victory came in the dramatic 5-4 triumph away to Veh's former club Eintracht Frankfurt on Matchday 9.