He won a by-election triggered by the death of Lord Avebury, a contest in which only three existing members of the House of Lords were able to vote.
Viscount Thurso was a member of the Lords for four years between 1995 and 1999 before leaving after Labour's reforms axed most hereditary members.
He then served as MP for Caithness and Sutherland for 14 years until last May.
Under existing Lords procedures, only existing Lib Dem hereditary peers in the Lords were entitled to vote in the contest. All of them - the Earl of Oxford and Asquith, the Earl of Glasgow and Lord Addington - voted for Viscount Thurso.
The six other candidates were Earl Lloyd-George of Dwfor, the great grandson of the former Liberal prime minister David Lloyd George, Lord Calverley, the Earl of Carlisle, Lord Kennet, Earl Russell and Lord Somerleyton.
John Thurso is the grandson of Archibald Sinclair, the former Liberal Party leader who was a member of Winston Churchill's coalition government during World War Two.
He lost his parliamentary seat in last year's election and has since been appointed chair of VisitScotland.
Prior to Monday's election, each candidate was asked to submit a 75-word statement about their background and relevant experience.
The election has been described as a farce by Lord Avebury's son John Lubbock, who likened the contest and size of the electorate to a rotten borough from the 18th Century.
Reforms to the Lords by the last Labour government left just 92 hereditary peers in place. Since then vacancies arising from the death of members have been filled through a series of by-elections.
Former MP John Thurso has been elected to sit in the House of Lords as a Liberal Democrat hereditary peer.