The Israel international midfielder, who spent two years with the Hammers between 2005 and 2007, announced the move via his Twitter account.
"After a long and busy day I can say I had 3 offers from PL clubs..but not from Liverpool or Arsenal like some reports," wrote the 32-year-old.
"But I`m very happy to confirm that I will join on loan to West Ham! I can`t wait to start..great club."
Benayoun originally joined West Ham from Racing Santander on a four-year contract and played for them in the 2006 FA Cup final.