Pizarro, who turns 40 in October, has received a "performance-related contract" and will provide back up cover for the forward line.
"I'm delighted to have the chance to join the team again, and to finish my career at the club I started in Europe with," the Peruvian national said in a statement issued by the club.
"I'm looking forward to sharing my experience, but I don't want to hide that I'm coming back to score goals as well. I'm convinced that we'll have a strong season together."
Pizarro had been playing at FC Cologne over the last season, but has kept contact with Bremen.
"He will have a good influence in the dressing room with his positive energy, conviction and hunger for success," said Bremen coach Florian Kohfeldt.
"If he's fit and healthy I'm sure he can help us in crucial moments this season. Claudio is a legend and he will get his moments this season."
Pizarro first wore Bremen's green and white jersey in 1999 and subsequently returned to the club in 2008, 2009 and 2015.
The striker, who had also played for Bayern Munich, has been in 446 Bundesliga games and is the top-scoring foreigner in the German top league with 192 goals.