The Hornets' forward was was sentenced to 10 months for affray in June but has been freed and the Championship club confirm that he will resume his career at Vicarage Road
The forward's part in an attack outside a Birmingham nightclub in the early hours of February 29 saw the former Walsall player kick a person in the head.
A man suffered a broken jaw and another received 20 stitches to the mouth as a results of the fracas and Deeney was sentenced to 10 months imprisonment on June 25.
The Hornets attacker wrote on Twitter: "Just to confirm to everybody I have been released from jail. Thanks for all your good and bad messages, will reply to as many as I can."
|33/1||Watford are 33/1 with Bet365 to win the Championship|
A statement, released on August 31, read: "Given the remorse demonstrated by Deeney, both in court and through his public apology, Watford is hopeful of reaching a resolution to support the player through his rehabilitation while he continues his playing career with the Hornets."
Solihull-born Deeney joined the Hertfordshire outfit from Walsall in 2010 and has made 79 first-team appearances for the club, scoring 13 times in total.