The 24-year-old made 39 appearances during a loan spell at the Reebok Stadium last season, and manager Dougie Freedman has revealed that Spearing was his top transfer target of the summer.
The 39-year-old told BBC North West Tonight: "Jay was my top target. He's got the potential to be a very, very good player.
"What I like about him is that he comes in every day with the attitude to get better.
"That's what struck me about Jay - not only was he a fantastic football player with a great pedigree coming from Liverpool, but his hunger and desire to get better was really the thing that struck me."
Spearing leaves Liverpool after making 55 appearances at Anfield.