The 25-cap second-row came through the pathway at the Blues and made 16 first-team appearances before switching to the Dragons via a short stint at Moseley.
He made 110 appearances during seven years at Rodney Parade, captaining the region during the last three seasons and has established himself on the international stage.
However, he will now move back to the Welsh capital as John Mulvihill continues to build a squad to compete on all fronts.
Mulvihill said: “We are naturally delighted that Cory has opted to join us here at Cardiff Blues and it is another statement highlighting our ambition.
“Strengthening the front five has been a focus in our recruitment and the signing of Cory is a step towards that.
“He is an established international, who is not only a big, physical and athletic presence but he is a role model and leader, who will play a key role in mentoring some of our younger players.
“He is a player from, and passionate about, this region so it is great to get him back here and we are looking forward to him playing a key role as we build for the future.”
Hill, who captained Wales Under-20s, came through the Cardiff Blues academy system and represented Pontypridd during his formative years.
He remains grateful to the Dragons for the opportunities they afforded him but is now looking forward to taking the next step in his career.
The 28-year-old said: “I’m really excited to be returning to Cardiff Blues. This is where I began my career, where I came through the ranks and I have a huge amount of friends at the club.
“I will always be grateful to the Dragons, and their supporters, for the the seven years I enjoyed at Rodney Parade. I have so many fond memories and immense pride from captaining them.
“However, I feel now is the time for a fresh challenge and a new direction in my career. There is a huge amount of talent in the Blues squad and a lot of young boys coming through with potential.
“I have been really impressed with John Mulvihill’s vision for the Blues and the style of play they are trying to implement, especially at the Arms Park.
“The competition for places will be intense but I am looking forward to linking up with them, playing my part and contributing to what is a really exciting future.”
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