Donovan, 29, joined Everton in 2010 on another short loan, and appeared in 13 matches and scored two goals. He will be eligible to play in Everton's opening match of 2012 against Bolton on Jan. 4.
The U.S. international, who has also had stints at Bayer Leverkusen and Bayern Munich, will remain with Everton through late February. His last game with the club will be the Merseyside derby against Arsenal on Feb. 25.
"The opportunity to return to Everton and play for such a well-respected club ... was simply too good to pass up. I thoroughly enjoyed my time at Everton in 2010 and I'm hopeful that we can experience similar success this time around," Donovan said.
Donovan had 16 goals and five assists in all competitions for L.A. in 2011 and helped the club win the MLS Cup in November by scoring the only goal in a 1-0 win over the Houston Dynamo. He was MVP of the final.
He will return to the Galaxy in late February, ahead of the CONCACAF Champions League quarterfinals series against Toronto FC and their MLS season opener in March.
The Galaxy will play their first game of 2012 on March 7 when the club travels to Toronto for the first leg of their Champions League series. The Galaxy will open the 2012 MLS season three days later on March 10 at home, although their opponent has yet to be determined.