The 31-year-old was released by West Brom at the end of last season and has now been added to Brian McDermott's squad as they prepare for life in the Barclays Premier League, having won the npower Championship title last season.
Club chairman John Madejski said: "I would like to welcome Nicky back to Reading Football Club, he was an outstanding player here once before and we are looking forward to him triumphing even more this time around. I know the manager was very keen to have Nicky back, that makes a huge difference and so good luck to him once again."
Shorey first played for Reading between 2001 and 2008 before leaving to join Aston Villa, having played 286 games for the Berkshire club.
Source: PA
Source: PA