The Pozzo family, who also own Spanish club Granada, brought in as many of 14 players on loan to Watford last season from Udinese and Granada.
The Football League this summer closed that loophole which did not put a limit on the number of loans available from foreign clubs, bringing it into line with the domestic policy regarding loans from British teams.
It states a maximum of five loan players can be included in any matchday squad, while eight loans are permitted throughout the season and only four from one club.
In response, Watford signed some of the more successful loan players from last season, including Fan's Player of the Season Almen Abdi, popular defender Marco Cassetti, midfielder Cristian Battocchio and wing-back Daniel Pudil.
Abdi and Battocchio have penned deals until 2016 while Cassetti returns on a one-year agreement and Pudil - the only player to come from Granada - has signed until 2017.
Manager Gianfranco Zola has also brought in four new faces from Udinese in the shape of defender Gabriele Angella, full-back Marco Davide Faraoni, forward Diego Fabbrini and Paraguayan striker Javier Acuna.
Angella and Faraoni, both Italy Under-21 internationals, have both penned five-year agreements until 2018, senior Italy international Fabbrini until 2017 while former Real Madrid B striker Acuna is due to stay until 2016.
The Championship club, who lost out to Crystal Palace in May's play-off final at Wembley, have also announced that more new signings are expected.