James, who featured 18 times for North End in the latter half of last season, has been brought in from United to strengthen Darren Ferguson's midfield as the Preston manager looks to bolster his squad.
He told PNE Player: "I'm very excited to come back, it got sorted at the end of last season, finalised over the summer period and it is a great Club to be at.
"I enjoyed my time here last year and I hope that I can improve on that this year."
James went onto say: "Last year I was playing and I was like a little kid really, I've already had 19 games in the Championship so this year I'll go out and know what to expect.
"With the five tough games we have at the start of the season I will know what to expect unlike the first games I had last season when I didn't know what to expect."