Reid, 22, scored four goals during a season-long loan with the National League side last season.
He has one year remaining on his Exeter contract and returns to Plainmoor for his third spell.
Osborn, 18, was signed by Southampton from Torquay's academy but was released by the Premier League side this summer.
"Neal will be pushing Ryan Clarke as hard as he can, and it's great to have a local boy in the squad," said Gulls boss Kevin Nicholson.
On Reid, he added: "He's highly motivated to progress, as this is his last chance to show Exeter boss Paul Tisdale that he should be playing League football."
Torquay United have re-signed Exeter forward Jamie Reid on a six-month loan deal, while goalkeeper Neal Osborn has returned after a stint at Southampton.