The 51-year-old was an assistant for the Capitals under former head coach Ron Wilson from 1997 to 2002.
He followed Wilson to San Jose (2002-2008) and Toronto (2008-2011) and now returns to Washington to assistant new head coach Adam Oates.
Hunter, a former player and Calgary native, has a career coaching record of 499-394-154 in 13 NHL seasons. He helped the Caps reach the Stanley Cup final in 1998.
Hunter played 16 seasons in the NHL for Calgary, Quebec, Vancouver and San Jose. The right-winger won a Stanley Cup in 1989 when he was a member of the Flames.