The former England striker had left the club at the end of last season after his contract expired but following a summer without securing a move elsewhere he is back at Upton Park.
Injury to Andy Carroll meant Sam Allardyce lacked a centre forward with the ability to hold up play so he switched his attentions to Cole, who turns 30 on Saturday.
Swift return: Carlton Cole is heading back to Upton Park as cover for Andy Carroll
Cole has been training with West Ham at the club's Chadwell Heath base for a number of weeks in a bid to regain fitness and a contract has been on the table during that time.
David Gold said at an event on Wednesday night it would be signed if the player came through the Charlton game unscathed and Cole told fans afterwards he felt good.
It means his association with West Ham will be taken into an eighth year after originally signing in 2006.
Caroll, meanwhile, could return to the first team by December. Gold on Saturday tweeted: '(Carroll's) working hard to return before December.'
Focal point: Cole's ability to hold the ball up will suit West Ham's direct approach
Road to recovery: Andy Carroll could make a first-team return by December
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