Penny, 26, was spotted playing basketball by former Wolves coach Paul Cullen and burst on to the scene in 2007, scoring 15 tries in 15 games, earning him a place in the Super League Dream Team.
After Cullen departed, Penny struggled to get in the team under Smith, and was farmed out on loan to Widnes and Harlequins, before departing to join Wakefield.
A further loan spell at Widnes and a couple of seasons at Swinton followed, but the winger has now gone full circle and is back at the Halliwell Jones Stadium.
He said: “It was a shock, I thought he had sat on his phone and rang me by accident!
“I had given up on making a return to Super League, it wasn’t even in my thought process.
“Tony gave me a call and said he’d been impressed with what I’ve been doing over the last couple of years, and whether I’d like another opportunity and I definitely wasn’t going to turn him down.
“I thought my time had gone, so it means a lot to me that I’ve been given a second chance, especially by someone like Tony.”
It’s been a whirlwind few months for Penny, who soon after signing was part of the Wolves squad that enjoyed a pre-season training camp in Australia, and he has also celebrated the birth of his second child.
Penny added: “It’s good to be back, it feels like home really, it doesn’t feel like I’ve ever left.
“Looking back now I’m glad I took the path that I have.
“It was a bit of a mutual agreement when I left four years ago, chances were limited for me and I wanted to play more regularly so we decided it would be best for me to move on.
“I think this time around I’ve actually learnt my role as a winger, last time I was very raw and didn’t really have a rugby league background.
“I feel like I’ve learnt a lot while I’ve been away.
“It has been quite a rollercoaster ride!”