The 62-year-old ended his second spell as chairman of the Hornets in 2002 but is back on board to join former manager Graham Taylor in a presidency role.
He said: "Watford football club is in my blood. Wherever I am in the world I cannot resist keeping up with the news.
"I wish the new chairman and board, the manager, the team and all Watford's loyal supporters a very successful conclusion to the season."
New chairman Jimmy Russo said: "I am delighted that Elton is once again a part of this great football club.
"He is as passionate a person when it comes to Watford as you would wish to meet and he has been fully supportive."