Dynamo had initially decided not to renew the forward’s terms at the end of last year and a return to Britain looked a certainty for the 26-year-old.
Driver, who had been linked with a return to Hearts, left Tynecastle on loan in Februrary 2012 before making the move permanent last summer.
He had recently gone on trial with struggling English Championship club Yeovil but was not offered a deal due to his lack of match fitness.
Driver has now returned stateside on ‘a multi-year deal with club options’.
Tweeting about his new contract, Driver said: “U gonna miss me dad”, reply “no”. “Think he’s just as happy for me to leave for Houston as I am to be back! Cant wait. Thanks for the tweets!”
Houston head coach Dominic Kinnear said: “We are happy he is coming back to play for us this year.
“I thought he had a good season for us in 2013. Him returning for us in 2014 strengthens our midfield and our overall squad.”