The 21-year-old, who spent a few months on loan with Championship side Ipswich Town earlier this season, scored three times in 22 league appearances for Rovers last term.
"I'm delighted to be back, it feels like I have unfinished business with Rovers after injury ended my loan spell last season and relegation," Grant told the club's website.
"There were other offers, but the manager made it an easy choice for me. The fans took to me last time, so it was a straightforward decision really. The manager told me how much he wanted me, and having a manager who has confidence and believes in you makes a real difference in football.
"I am a creative player, so I want to create and score goals, but I just want to help out the team in any way I can. So, really, my only target is to ensure we win promotion and are all celebrating by the end of the season."
Grant went straight into the starting XI for Rovers' home clash with Stevenage this afternoon.