Collison, who signed a hardship exemption, is expected to be in the lineup on Saturday against the Brooklyn Nets. He worked out for the Lakers recently at the team's practice facility, sources told ESPN.
The Lakers also signed free-agent forward Stanley Johnson to a 10-day hardship exemption.
Despite free-agent offers in the neighborhood of $10 million annually, Collison, 34, surprised the NBA with his retirement after completing the 2018-19 season with the Indiana Pacers.
He had discussed returning to the NBA during his time away -- including with the Lakers -- but finally agreed to come back now amid the COVID-19 turmoil throughout the league as well as the Lakers' need to stabilize their playmaking and bench.
The Lakers have several players in COVID-19 protocols, including guard Malik Monk. They are reeling with four straight losses and a 16-17 record.