He told Yeovil's official website: "It's good to be back at Yeovil and get some games. More importantly, I hope we can pick up the right results as well.
"The manager here (Terry Skiverton) has done a terrific job. Now hopefully we can push right up the table and finish as high as possible.
"Obviously I know the gaffer and Dazza (Darren Way) from before and I also know Scott Murray from the City days," he added.
Williams left Yeovil in December 2004 to join West Ham in a £250,000 deal. He then moved on to Ipswich before signing for Bristol City in the summer of 2008.