Cancelo previously spent a year at Barcelona after joining on loan from Manchester City in 2023, appearing in 32 LaLiga matches. The three-time Premier League winner joined Al Hilal in August 2024.
"FC Barcelona and Al-Hilal Saudi FC have reached an agreement for the loan of the Portuguese full-back until the end of the season. He will wear the number two shirt," Barcelona said in a statement on Tuesday.
Two hamstring injuries sidelined Cancelo for more than two months last year, but he returned in time for the Club World Cup, where he played a key part with an assist when Al Hilal knocked out Manchester City 4-3 in the round of 16.
Cancelo, a part of the Portugal squad that won the Nations League in 2018-19, scored two goals and provided two assists in Portugal's successful campaign to qualify for this year's World Cup in the United States, Mexico and Canada.
LaLiga leaders Barcelona are away to Racing in a Copa del Rey match on Thursday.