The 34-year-old goalkeeper has moved to the Premier League champions for a reported 1.7 million pounds and has committed to a two-year contract.
Rulli previously spent the 2016-17 campaign with City but did not feature in a competitive first-team match during that spell.
His return comes after England goalkeeper James Trafford departed earlier this week, joining Leeds in a deal that could eventually reach 45m pounds.
Rulli is expected to provide cover for Gianluigi Donnarumma, who remains Pep Guardiola's preferred option between the posts.
Rulli arrives with considerable experience of European football, having represented the likes of Real Sociedad, Montpellier and Ajax during his career.
He has also collected eight senior appearances for Argentina and was included in the squads that lifted the 2022 World Cup and 2024 Copa América.
One of the goalkeeper's most memorable moments came in Villarreal's 2021 Europa League triumph against Manchester United. Rulli converted his spot-kick before producing a crucial save from United goalkeeper David de Gea in the shootout. The stop proved decisive as Villarreal eventually prevailed in the marathon penalty contest.
The veteran now returns to City in a backup role, more than nine years after his first stint at the club.
