The 31-year-old midfielder will rejoin the Trotters ahead of their FA Cup with Budweiser clash at home to Blackpool on Saturday and remain with Dougie Freedman's side until the end of the 2013/14 season.
Danns originally joined Bolton in September, making 13 appearances and scoring four times for Wanderers before his loan spell expired after a 1-0 win at Barnsley on Boxing Day, in which he scored the only goal.
He was in attendance at King Power Stadium on Sunday as the Foxes beat Bolton 5-3 to go four points clear at the top of the Championship table.
Upon returning to the Reebok Stadium, Danns will be available for selection in all competitions, including the FA Cup and the Football League Play-offs should Bolton be involved in them. He will be ineligible when City travel to the Reebok Stadium in the Sky Bet Championship on Tuesday 22 April.