Mills moves to Oxford in a permanent transfer and has penned a contract for an undisclosed length.
"Oxford United is like a home to me," Mills told the club website, having spent the first-half of last season on-loan with the U's.
"I feel my business here at the club is unfinished. I had the most enjoyable period in my career here last season. Now, I want to pick up where I left off and keep bringing success."
Oxford United head coach Gary Rowett added: "Stan is somebody who was presented to me early on.
"Everyone within the club has spoken incredibly highly of Stan as a player, but more importantly as a person. When the chance arrived to sign him permanently, it was one we wanted to take.
"What I enjoy about watching Stan is that he is confident playing on both sides of the pitch. He is as comfortable cutting in from the left on his right foot as he is driving down the right to get crosses into the box."