The 22-year-old front man has returned to the Globe Arena after a spell on loan from Rovers at the end of last season where he scored goals against Barnet and Stevenage.
The Tranmere Academy product made his first-team debut for Rovers in January 2012 and scored two goals against the Shrimps in a 2-1 defeat to Prenton Park in August 2014.
Morecambe manager Jim Bentley said: "Cole is another young player with bags of potential.
"He showed a good attitude here last season and definitely gives us different options. He is a good finisher and works really hard and we hope to see him continue his development this season''.