The 27-year-old - who recently anounced his departure from Emmerdale - is reprising the role of Lee Hunter, who he played between 2001 and 2005, as part of new producer Paul Marquess' shake-up at the soap.
A show source told Digital Spy: "It's no secret that Hollyoaks isn't at its best, but Paul's decision to bring Alex back into the fold shows that he's committed to taking it back to its best."
The source went on: "He wasn't really used at Emmerdale but that'll change here."
Alex played postman Jamie Hope in the rural soap from 2006, and last month announced his decision to leave.
New producer Paul has taken the axe to a string of characters in the teen soap as he makes his mark on the show.