The 27-year-old has been training with Pools in recent weeks and played a part in the pre-season friendly at Whitley Bay earlier this month.
Manager Craig Harrison liked what he saw from a player who is comfortable operating on the right side of midfield or in a central striking role and has now struck a deal to secure his signature.
Franks previously played for the club between 2012 and 2015, making 143 appearances and scoring 16 goals following his arrival from Middlesbrough.
The Stockton-born player has spent the last two years north of the border with Ross County with whom he celebrated winning the Scottish League Cup in 2015/16.
Franks earned caps for England at under-16, 17, 18, 19 and under-20 level.
Franks will be free to play once international clearance has been granted.