The striker, 28, linked up with the Shrimpers on loan from Coventry in March and scored twice in nine games as the Essex club's promotion bid last season finally ended with a play-off semi-final defeat to eventual winners Crewe.
But, with his contract at Coventry having expired this summer, Eastwood has cemented his return to Roots Hall - five years after he left for a big-money move to Wolves having bagged 65 goals in 135 appearances.
The fans' favourite told Southend's official website: "It was never really in doubt that I would come here. I came back at the end of last season and really enjoyed it and I am happy to come back permanently now.
"Being at Southend is the most enjoyable time I have had in my career and that is what has brought me back here twice.
"It took a while to get everything done but I am back training and that is going well, so I am delighted to get pen to paper."