Zidane's return suggests that Madrid president Florentino Perez has given the Frenchman assurances that signings will be made this summer - assurances that he couldn't give back in May when Zidane stepped down from the job.
Real Madrid have completed the €50 million (£43m/$57m) signing of Eder Militao from Porto, with the defender set to link up with them on a six-year contract.
Mourinho had said in January that being linked in the press with a return to former clubs Real Madrid and Inter Milan was a "tremendous honour".
Still only 21, he began his career with Sao Paulo in his native Brazil before moving to Porto last summer.
After undergoing medical testing overnight on Tuesday, Real Madridconfirmed the news on Thursday.
The Brazil global, who joined Porto from Sao Paulo in the summer, will join up with his new team-mates at the start of next season.
"He has been named the best defender of the championship for five consecutive months". He played 34 matches with the Portuguese champions, scoring three goals, including one in the group stage of the Champions League.
Madrid says Militao is a quick defender who can play in the middle of the defense or as a right back.
And highlights of him in action for Porto shows he is an exceptional defender.