Hreidarsson, who made 123 appearances in five years with Portsmouth, is now manager of Icelandic side IBV and has just agreed to sign ex-Pompey and England keeper James.
Last month Hreidarsson and cash-strapped Pompey arranged a fund-raising friendly between the sides, and the 38-year-old has pledged to dust off his boots and play in the Fratton Park match on Tuesday, April 16.
Hreidarsson said: "It is a great opportunity for my players to play at a legendary ground and all the money will be going to a great cause.
"My time at Pompey was a rollercoaster ride, with some terrific highs like winning the FA Cup in my first season and also some difficult times, which saw some good people lose their jobs.
"All the time, though, the Pompey fans were different class and I didn't feel I got the chance to say goodbye to them properly after I was left for Coventry in 2012.
"I will be registered as a player for IBV for the new season, which starts in May, to cover for suspensions and injuries, so I will be playing for sure.
"I'm really looking forward to it. I now have a manager who appreciates my full potential as a striker!"
Meanwhile James, who made 158 appearances for Pompey and won the FA Cup in 2009, tweeted: "I am... looking forward to playing for IBV in the match at Fratton Park. Lets hope the club is sorted, sharpish!"