The 29-year-old signed a deal until the end of the season and could make his competitive return in claret and amber on Tuesday night as Motherwell aim to extend their two-point lead in second place in the Scottish Premier League when Dundee United visit Fir Park.
McFadden scored 32 goals for Motherwell as a teenager before moving to Everton in a £1.25million deal almost 10 years ago and comes back looking to kick-start his football life.
The forward has only made 11 appearances, mostly off the bench, in short-term spells as Everton and Sunderland since suffering a damaged cruciate ligament while at Birmingham in September 2010, not long after his most recent international appearance against Liechtenstein.
But McFadden, who saw a move to Nottingham Forest fall through earlier this month when Alex McLeish left as manager, believes he is as fit as can be and is looking to reach peak sharpness and form at the club where he made his name.
McFadden, who made his Fir Park debut as a 17-year-old, told MFCTV: "It's great. I obviously had a good time the first time and I need to get back playing football and this is probably the best place for me at the moment.
"I can't wait. Obviously the team have been doing well this season and I'm hoping I can add something and get some games under my belt and put my injury worries behind me."
The fans' favourite held talks with Motherwell earlier in the season, but could not agree a deal and signed for Sunderland.
However, the move made sense after returning to the club for a second training stint after failing to make a major impact at the Stadium of Light.
"It's been difficult," he said. "I was out for over a year with my injury and it took me a wee while, even when I was fit and training, to get back to a level I was happy with.
"I never really managed to get a run of games to get back to my best.
"This is the perfect opportunity for me to do that and hopefully I can do that in the next couple of weeks."
McFadden has scored 15 goals in 48 appearances for Scotland, including the memorable winner against France in Paris in 2007, after making his international debut while a Motherwell player.
And he is determined to resume his career for his country under the tutelage of Motherwell manager Stuart McCall, who is one of national team boss Gordon Strachan's assistants.
"The last wee while people have been questioning my fitness and my ability to play games and get back to the level I was at," he said.
"Hopefully this is the springboard for me to get a good run of games and let people see I'm fine and over my injury and ready to play.
"Obviously I'd love to play for Scotland again."
McCall had earlier insisted he had not held talks with the player and would speak to him after the United game given the "euphoria" surrounding speculation over his potential return.
But the club were privately confident of making the return happen and sealed the deal after McCall's pre-match media conference.
And, given McFadden has been training with Motherwell for a fortnight, he is likely to start on the bench on Tuesday night as the Lanarkshire side look to build on their 3-0 victory over Inverness.
"I'm as fit as I can be from training," he said. "I'm lacking a bit of match-fitness and sharpness but the only way you get that is by playing games.
"I'm ready whenever needed."
McCall later revealed McFadden had approached him on Monday afternoon looking to finalise a deal.
"I said today that I wouldn't speak to James until after the Dundee United match and that was absolutely the plan," McCall said.
"However, James actually came and spoke to me about 3pm and we sat down and discussed football. Obviously, things have snowballed in recent days and there has been a lot of speculation.
"We never talked finances; that would take place between the club, James and his representatives.
"He just wants to play football, which is obviously great, but we have been going well and the lads currently in the squad have performed brilliantly to get us to second in the table as it stand. He understands that, and knows he will have to win his place in the side."
McCall added: "But it's an exciting time. We're getting a player who is really hungry and determined to do well for both Motherwell and himself."