The 38-year-old started his career with the Harriers, scoring 70 goals in 139 games, before joining West Bromwich Albion in 1997.
Hughes has returned to Aggborough after Forest Green Rovers terminated his contract by mutual consent.
His move follows the signing of Burton Albion striker Dominic Knowles, 22, on loan until the end of the season.
Hughes' last goal for Forest Green Rovers was against Kidderminster in a 3-2 home loss on Boxing Day.
Smethwick-born Hughes began his career with the Harriers in 1995 before making his name with West Brom, which led to a £5m move to Coventry City in August 2001.
He returned to The Hawthorns to help Albion win promotion to the Premier League in 2002, but was sent to prison in August 2004 for causing death by dangerous driving.
After three years out of action, he then returned to play in the lower reaches of the Football League where he remained a prolific scorer with Oldham, Notts County and Port Vale before dropping down to the Conference with Forest Green in January 2014.
Promotion-chasing Kidderminster, who have lost their last four home games, hope he and Knowles can provide an extra spark ahead of Saturday's visit of Eastleigh to Aggborough.
Originally on Burnley's books, Knowles left Turf Moor in June 2013 and dropped into the Conference North before joining Burton.
He has scored four goals for Burton in 48 appearances, 28 of which have been as substitute.
Harriers have already had to let three strikers go this term for budgetary reasons, Nathan Blissett to Bristol Rovers, Michael Gash, who joined Barnet, and Freddie Ladapo, while Reece Styche is on loan at Conference North high fliers Tamworth for the rest of the season.
Striker Lee Hughes has re-joined Kidderminster Harriers, more than 17 years after he left the club.