It's been six years since he was last at his hometown club and City boss, Higgins is delighted that he's agreed to return.
"I'm delighted to welcome Shane to the club," said Higgins. "I think he had a very, very impressive season with Finn Harps. He's at an age where he brings vast experience.
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"He's 30 years of age. We have two young centre backs at 22 or 23 years of age so we need that experience. The attributes that Shane has as a player are attributes that I like. We had a very open and honest conversation so he knows what's going to be demanded of him. It's very important too that Shane is very excited to be a part of this and it's a great opportunity for Shane as well."
Higgins played alongside McEleney at Derry and won the FAI Cup together in 2012 and he insisted the signing of the Shantallow man was by no means a way to appease his younger brother Patrick. Indeed, Higgins said Shane was a player he's always admired.
"I played with Shane. And this isn't a signing to make people happy, just to make that clear. His brother happens to be here but I just want to be very clear that Shane is a player I desperately wanted at the club. I also made it clear that there's certain criteria that have to be met and we want to drive ourselves forward. With him being one of the senior players he has to lead by example in the dressing room.
"Last year was probably the best I've seen him from a defensive aspect where his positioning is now better," he said. "He's braver and that's not an insult but he puts his head on the block where when I played with him he was quick and brilliant on the ball so I think he's added a new dimension.
"He's a more mature player than he ever was. He's got good recovery pace and is outstanding on the ball but he's become a better defender. His experience will be invaluable to the group.
"I know he's matured as a person over the years as well and he's someone I always rated highly even when I played with him and that's not changed. I'm just delighted he's wanted to come here and we've got it done."
McEleney joins Michael Duffy, Patrick McEleney and Will Patching as players who have made a return to Brandywell in the close season and Higgins believes it's important that he knows the character of the players he's bringing to the club.
"When you have good players who live in the city, then they should be playing for Derry, it's as simple as that. I was clear early on I wanted Shane to be a part of that and when we met we had a really good conversation. We know where each other stands. It's been a massive help to me that, apart from Brian Maher, anyone I've signed so far, I know them really, really well personally so I know exactly what's coming into the dressing room and know exactly how they conduct themselves and I know they will be huge influences around the club."