The 30-year-old had a spell with the Royals last term, scoring twice in 15 appearances, and with father Paul now in charge of the club, made his move permanent yesterday.
Ince joined Luton in the 2020-21 campaign, featuring seven times, with injury hampering his stint at Kenilworth Road.
The former England U21 international had started his career at Liverpool, with moves to Blackpool, Hull, Derby and Huddersfield to name just four, before joining the Potters for £10m in July 2018.
After his arrival, boss Paul Ince said: “Thomas is my son. But, importantly, he is a Reading player the moment he arrives at the training ground every morning.
"His talent has always spoken for itself and he is a very good character to have in your dressing room.
"He still wants to improve, he still wants to succeed and he proved his worth here at Reading in the latter stages of last season.
"So I am very pleased he has now committed the next three years of his career to this club.”