The 39-year-old, who retired from international cricket in 2009 after a 103-Test career, last played in the 2010 Indian Premier League with Chennai.
But Heat coach Darren Lehmann, a former Test team-mate of Hayden, said he was ready to return.
"He's been training for a few months now so we're excited to have that knowledge around the place," Lehmann told reporters.
Hayden's return means he has to relinquish directorships of the Cricket Australia and Queensland Cricket boards, as current players are not allowed to have both roles.
"We're just excited to have his playing ability first and foremost and obviously his entertainment value, what he brings to the table for the Heat," added Lehmann.
Hayden will play alongside former New Zealand captain Daniel Vettori and compatriot Brendon McCullum in the Heat team, in the new-look domestic competition from December 30-February 5.
Several overseas players have signed up with the eight franchises that will contest the tournament, including South Africa's Herschelle Gibbs, Paul Collingwood of England, and Pakistani Shahid Afridi.
Copyright AFP (Agence France-Presse), 2011