Sky Sports reported earlier this week that Premier League outfit Newcastle United were interested in Ince, but Derby have won the race for his signature.
According to BBC Sport, Derby had to pay Hull around £4.75 million for the services of the former Liverpool prospect.
Ince, who played for the Rams on loan from Hull during the second half of the 2014-15 season, is delighted to be back at the iPro Stadium, with Derby teammate George Thorne welcoming his return.
Ince initially joined Derby on loan from Hull in the January transfer window for until the end of the 2014-15 season.
The English youngster quickly established himself as a key player for the Rams and played an important role in their push for the Championship playoffs.
In 18 league appearances, the former Liverpool prospect scored 11 goals and created 24 chances, while having a pass accuracy of 83% and a shot accuracy of 57%.
Derby ended the 2014-15 Championship campaign in eighth place.