A person familiar with the deal said Monday night that Hall decided to return for approximately $2 million in 2013, a considerable drop-off from the $7.5 million in salary he would have made under his previous contract.
The person spoke under the condition of anonymity because the Redskins have not announced the deal.
Hall was a casualty of the Redskins' $36 million salary cap penalty imposed by the NFL for the way the team structured contracts during the 2010 uncapped season. The second half of the penalty kicked in this year, so Hall was released by coach Mike Shanahan on the eve of free agency so the Redskins could get under the cap.
Hall talked to other teams but couldn't find a better option than to stay where he was - albeit for considerably less money.
"The whole point of free agency is to test the market to see if anything's better out there," Hall told 106.7 the Fan. "I think Mike made it known that he wanted me to be a part of this football team. I made it known I wanted to be part of this team."
Hall, 29, had two years remaining on a burdensome, six-year, $54 million contract when he was cut. He said understood "the business side of things" that led the reigning NFC East champions to send him on his way. The cap penalty has been a contentious issue with the Redskins, who have called the sanction unfair.
"I felt like part of it was my fault. ... I felt like I owed it to these guys to give it all I've got for one more year," Hall said.
Hall's return creates a major shift in offseason priorities for the Redskins, who were in need of a new starting cornerback in addition to other needs - and with very little money to spend.
Hall joined the Redskins during the 2008 season. He had four interceptions last year and has 39 in his nine-year NFL career.