The 75-cap Socceroo made his senior debut with the Roar in 2007 and will give Warren Moon's side an attacking impetus following the release of marquee recruit Charlie Austin.
Kruse went on to have a successful career in Germany before a stint back in Australia with Melbourne Victory last year, which was cut short due to injury.
The 34-year-old has been training with the Roar since December and will come into consideration for this weekend's game with Adelaide United.
"Coming off the knee injury I had last season, I had to do all the right things to give myself the best chance because I didn't want to come back if I couldn't contribute anything to the club," Kruse said.
"I've played a long time in my career so if I can rub off onto them and help them in any way, then it's going to be a positive.
"Hopefully I can make an impact off the bench in the time that I play, and obviously the goal is to play finals football so hopefully we can do that."
Meanwhile, Western Sydney have re-signed defender Tate Russell on a two-year deal.
Russell made his ALM debut in 2018 and has made close to 70 domestic appearances for the club.
The 23-year-old is sidelined by an ACL injury that will see him out of action until the 2023-24 pre-season.
"It's good to know that you have the support of the staff, the people in the backroom and the boss, and all the people that are looking forward to seeing you play," he said.
"... It's a nice feeling and a weight off my shoulders. I can now just knuckle down and focus on my football, get back to where I need to be and get that jersey back on."
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