Peters was UA's assistant director of basketball operations under Miller until leaving in 2014 to join former UA associate head coach James Whitford at Ball State.
The son of a college coach by the same name, Peters walked on to play for Thad Matta at Ohio State and then joined the UA staff as a graduate assistant in 2010-11. He then spent three seasons as UA's assistant director of basketball operations before leaving in 2014 to join Whitford a year after Whitford left the UA staff to become Ball State's head coach.
Whitford is 73-88 overall in five seasons at Ball State, but the Cardinals have shared two Mid-American Conference titles and averaged over 20 wins in the past three seasons.
"Danny’s ability to connect with players, his on-the-court coaching acumen and his relentless nature as a recruiter was paramount to their program’s success," UA coach Sean Miller said in a statement.
"Most important, Danny is a man of tremendous character who possesses an incredible work ethic. He also has a love for Tucson and Arizona basketball. I am elated to have Danny rejoin our coaching staff. We all look forward to working with him again.”
Miller still has one more assistant coach opening to fill after the UA fired Book Richardson in January and Lorenzo Romar left to become Pepperdine's head coach last month.
ASU coach Bobby Hurley says he wants Brandon Williams to "take the keys to this car."