Tremmel's contract expired in the summer but he has agreed new terms at the Liberty Stadium despite interest from clubs in England and Germany.
The 36-year-old, who won a Capital One Cup winner's medal in 2013, bolsters a goalkeeping department which also includes Lukasz Fabianski and summer signing Kristoffer Nordfeldt.
"It's fantastic to be back at Swansea - this is where I want to be
This is a special club," Tremmel told the club's official website.
"I had other options from top-flights clubs in Germany and England, but Swansea is my environment with my people.
"I know what Swansea is all about, and it's great to be part of the club.
"I've experienced the biggest achievement of my career here in winning the cup, and seeing the club continue to progress is really pleasing for me to see.
"Now I can concentrate on the season ahead and hopefully we can all make this another fantastic campaign for everyone to remember."
Tremmel has made 52 appearances since joining Swansea in 2011 and has spent the last few months at the club, training initially with the Under-21 set up before rejoining Garry Monk's senior side.
"It was really nice of the club to allow me to train with the Under-21s and then the first team despite me not having signed a contract," Tremmel said.
"Garry wants strong competition in every spot, and when you look at the players we have pushing for each position you can see we have that.
"We have Lukasz, Kristoffer and now myself in the goalkeeping department, and I think that's a great situation for the manager to have.
"We are here to push each other very hard in each training session, and that will help the club move forward."
Source : PA
Source: PA