The Stamford Bridge club have confirmed that Brazilian will head to St James' Park once more after being a hit there in the second half of last term.
There had been significant interest in the 22-year-old at the end of the season, with RB Leipzig and Paris Saint-Germain interested in the player. However, Chelsea have elected to keep hold of him and once again send him out on a temporary basis.
Kenedy enjoyed great success in the north east last term, having featured 13 times for Rafael Benitez's side after failing to hold down a regular place under Antonio Conte.
And he is thrilled to have returned to Newcastle.
"I'm so happy to have come back to my second home," he told the Magpies official website.
"I am so happy with this interest from Rafa Benítez, that he came back for me. I want to keep it going, the work that I did here before, for the new season.
"I have received many, many messages on social media from the fans. They made me feel appreciated, so I wanted to come here in this new season and give everything on the pitch."
Benitez, meanwhile, is equally thrilled to have the youngster back for another spell.
"I’m really pleased to have Kenedy back with us. I’m sure every fan will be happy with this signing," he said.
"Hopefully he can keep playing at the same level that he reached with us last season. I wish him all the best for his time here."
Kenedy had previously commented on the support he has received from the Newcastle fans.
Speaking at the end of last term, he said: "The first game - my debut - was really, really good because I didn't expect an atmosphere like this. And the game against Leicester was amazing because I'd never seen support like that.
"The supporters were really amazing. I really appreciate that because I didn't expect anything like this.
"The fans were something different. I felt honoured to be here; it was something really special and I'm a fan of Newcastle's fans."
Newcastle have confirmed that the player has already hooked up with the squad in their pre-season training camp in Ireland and will have his first session back with the team on Thursday morning.
He is their third addition of the summer transfer window, having previously snapped up Martin Dubravka and Ki Sung-Yueng on permanent deals.