Hibs have confirmed the signing of the midfielder, who left Middlesbrough by mutual consent in January following an injury-hit spell on Teesside.
The 28-year-old, who left Easter Road for Rangers in a £2million deal in January 2007, has been training with his boyhood club for several weeks and has made himself available to play despite the club being unable to afford any wages.
Thomson, who joins ahead of Sunday's Edinburgh derby with Hearts at Easter Road, told the club's official website: "I'm pleased to be back at Hibs - I want to help the team to achieve as much success as possible between now and the end of May.
"I always gave my all for the shirt and I'm looking to produce committed performances that will help the team challenge for a top-six place and for the Scottish Cup.
"With finances so tight at the moment, I've decided to put the club first and play for free. I'm looking forward to being back playing for Hibs again."
Manager Pat Fenlon added: "Kevin is a fantastic player, who will add extra quality to the squad and we're pleased to be able to sign him.
"The fact that he has agreed to play for nothing speaks volumes about his attitude and the squad will benefit from his experience and leadership qualities."
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