Thomas was rehired Friday by the team as a consultant, two years after he was fired as its coach and president.
"Isiah Thomas brings unique experience as a Hall of Fame player, coach, executive and owner, and we believe having him as part of our organization will be extremely beneficial to the team's success," Madison Square Garden chairman James Dolan and team president Donnie Walsh announced jointly in a statement.
Thomas, a Hall of Famer with the Detroit Pistons, had a dismal run as team president from December 2003-April 2008, with the Knicks never winning a postseason game despite often having the NBA's highest payroll. He was also the coach the final two seasons, getting dismissed after a 23-59 season in 2007-08.
Despite all that, plus that lawsuit brought by former team employee Anucha Browne Sanders that cost MSG $11.6 million, Thomas has remained close to Dolan and Walsh, even while coaching Florida International University, a job he will keep.
In fact, even when he was fired, he didn't even fully leave. Walsh kept him on in an unspecified role until Thomas took the FIU job.
"I'm excited to once again be a part of the New York Knicks organization," Thomas said. "I was honored to have been asked to help during the recent free agent recruiting process, and believe that this new role takes full advantage of my skill set as an evaluator of basketball talent."
However, the hire could violate league rules that forbid college coaches from having jobs with NBA teams, which aren't allowed to have contact with players who aren't yet eligible for the draft.
"We are reviewing the agreement, in consultation with the Knicks, for compliance with league rules," NBA spokesman Tim Frank said.
The Knicks said Thomas would "assist the team's senior management in various capacities, including player recruitment."
He helped the team in that area during free agency, when the Knicks landed Amare Stoudemire. He also was sent to Ohio to talk to representatives from LeBron James, who eventually signed with the Miami Heat.
Walsh thanked Thomas during the news conference for Stoudemire, sparking reports that Thomas would return to the organization, perhaps even as general manager.
Before his failures in New York, largely a result on overspending for big names that didn't work out, Thomas was known as a good evaluator of talent. He drafted Tracy McGrady, Marcus Camby and eventual Rookie of the Year Damon Stoudamire in Toronto. Walsh has used him to scout in New York, sending him to Europe to see current Knicks forward Danilo Gallinari.
The Knicks will call on those skills in Thomas' current role.
"He will provide valuable insight and analysis of young prospects from around the world," the statement said.