The Macedonia international also spent last season on loan at the Hawthorns, and West Brom boss Steve Clarke believes that familiarity will stand Popov in good stead for the new campaign.
“It was always our intention to get Goran back over the summer,” Clarke told the club's official website.
|5/1||West Brom are 5/1 with Paddy Power to be relegated next season
“He understands the Premier League better now as well and we will look for even more from him next season.”
The 28-year-old was used sparingly last season, making just 12 appearances in the Premier League, but Baggies technical director Richard Garlick believes he can challenge for a first-team spot.
“Everybody at the club is delighted Goran will be with us again this season,” Garlick told the club’s official website.
“Having spent last season at the club on loan, we know exactly what we are getting from him.
“He offers us something slightly different to Liam in that position and they will again battle it out for a starting place.”