The 23-year-old, who started his playing career with Shrewsbury Town, was virtually an ever present for the Seagulls last season and won both the Players’ Player of the Season and Supporters’ Player of the Season awards at the club’s annual prizegiving in May.
He took up the offer from Chester in the summer to play at the higher level in the Conference, but has been unable to command a place in their first team squad after falling out of favour with the manager.
“I’m made up that Frank has given me a chance to come back and play again and its up to me now to justify the faith he has shown in me,” said Danny.
“Hopefully I can hit the form that I showed last season.”
Bay boss Frank Sinclair commented: “I am very happy to have Danny back, because he brings experience and quality to the squad.
“It is important to keep on improving the group in such a tough, but tight league if we are to keep our ambition of being in the promotion mix, and the competition for places we now have is of a very high standard for such a small squad. Players will have to play and train to the best of their ability to remain or break into the team.”
Meanwhile, Sinclair has released defender Joel Bembo-Leta, who has been a regular starter in the side this season, but was dropped to the bench for last Saturday’s game against Bradford Park Avenue.
“I would like to wish Joel good luck in the future and thank him for his services and for the professional attitude he has shown while at the club,” said the manager.