Ramos was a free agent after being released by Paris Saint Germain this summer after two seasons in the French capital.
The 37-year-old had attracted interest from some Saudi Arabia clubs as well as Turkey and the Major League Soccer but he has opted to make a fairytale return to the Ramon Sanchez Pizjuan.
Ramos came through Sevilla's youth ranks to make 50 appearances for the first team before joining Real Madrid in 2005.
Ramos brought the curtain down on his 16-year career at the Santiago Bernabeu at the end of the 2020/2021 season.
He won five La Liga titles with Los Blancos, four UEFA Champions League trophies, four FIFA Club World Cups, two Copa del Reys among numerous other honours.
Sevilla are currently bottom of the Spanish La Liga table after failing to pick up a single point from their opening three games.
"It's a very special day, returning home is always a tremendous joy," said Ramos.
"I am happy to return and try to contribute as soon as possible, which is the important thing."
Ramos retired from international duty with Spain earlier this year, after amassing 180 caps and winning two European championships and the 2010 FIFA World Cup.
