The 36-year-old Iceland defender recovered from a serious Achilles injury to make 29 appearances for Pompey last season and earn a new deal, which he is expected to sign by Friday.
"We are really pleased about Hermann deciding to return. He is a good lad who showed some real character coming back last year," said Pompey boss Steve Cotterill.
"He has got another year's deal so, hopefully, he will come back after a bit of a break refreshed and raring to go again.
"We've given him a bit of a longer break like a couple of the others because they were still playing over the summer.
"It is now only a matter of him coming back into the UK and signing the contract. I expect that will all be sorted out in the next 48 hours."