The deal with the unrestricted free agent from Western Australia was finalised recently as the Magpies stabilise their list under Collingwood coach Nathan Buckley.
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Toovey ruptured the anterior cruciate ligament in his left knee in the dying minutes of the Anzac Day clash against Essendon in round five.
He had to undergo a knee reconstruction and is not expected to return until next season.
The Magpies said at the time he was a huge loss with Collingwood coach Nathan Buckley saying Toovey was possibly the team's most dependable player.
The coach described Toovey as "irreplaceable in defence" immediately after the injury.
"'Toovs' is a fantastic competitor, he would rate just about No.1 among his peers in terms of who's most dependable," Buckley said post-match. "Any way you cut it, he's going to be a loss for us."
Toovey is a popular, unassuming figure at Collingwood and is a trusted teammate. Scott Pendlebury recently described him as "a heart and soul player of the team"
Toovey played in the 2010 premiership team and was awarded the best clubman award last season.
He made his debut in 2007 after earning a place on the club's rookie list in 2006. He kicked three goals on debut but has played mainly as a defender, having kicked just five more goals in his next 113 games.
He has played in 81 wins and two draws in his 114-game career with the Magpies.
This re-signing appears to have happened much more smoothly in comparison to when Toovey last re-signed with the club at the end of 2011.
At that time Toovey's manager made headlines when he said the defender was prepared to examine other options but the controversy didn't last long with Toovey putting pen to paper soon after.
Collingwood began the season with five players on the free agency list.
Of the four remaining players, Ben Johnson announced his retirement during the week while skipper Nick Maxwell would appear a certainty to remain a Magpie.
Alan Didak returns to the VFL this Friday while injured star Dale Thomas reportedly wants to return to the field before putting pen to paper.
Collingwood has previously expressed confidence that Thomas will remain at the Magpies beyond 2013.
