In May, he registered for the Illawarra Cutters and finished the year as captain, earning NSW Cup Team of the Year selection at prop.
He was cleared to train full-time with the Dragons in August, the same time he began a university business degree.
"I am very thankful and grateful for the opportunity to return to the NRL with the Dragons," Packer said in a statement.
"I have learned a great deal and changed a lot over the past two years and I couldn't be happier with where things are at for me and my family.
"My family and so many people at the Dragons and the NRL have shown great faith in me and I look forward to repaying them for their belief and support over the coming seasons both on and off the field."
Packer's Dragons contract is expected to feature behavioural clauses.
But Dragons boss Peter Doust could not envisage any dramas, describing Packer's behaviour as "exemplary" since his arrival.
Packer has already undergone alcohol rehabilitation and education programs at the Dragons and attended other courses without prompting.
"Russell has achieved above and beyond the established requirements," Doust said in a statement.
Packer spent five years at the Warriors before linking with Newcastle in 2014 but was sacked by the Knights before playing a game due to his jail term.
The magistrate who heard Packer's case, Greg Grogan, labelled the prop's attack as "cowardly and deplorable".
The 22-year-old victim was left with a fractured eye socket.
"At regular intervals throughout the year the NRL were provided with thorough updates on Packer's progress with respect to his welfare and education ... and the approval of a playing contract comes as a result of his progression over a sustained period of time," a Dragons statement said.
"As expected, Packer's playing contract has some particular conditions with respect to him maintaining his education and welfare activities with which Packer and the Dragons do not foresee any problems."
- AAP
