Khaleda, 79, who leads the opposition Bangladesh Nationalist Party (BNP), arrived on a special air ambulance arranged by Qatar's emir.
Greeted by senior BNP leaders on Tuesday, she smiled and waved from her wheelchair as thousands of supporters, some draped in Bangladesh and BNP flags, lined the streets leading to her residence.
Red and green banners fluttered in the air, with chants of "The leader of the nation has returned!" echoing through the crowd.
Khaleda's return adds fresh momentum to the BNP's demand for elections by December.
The country has been under an interim government led by Nobel laureate Muhammad Yunus since Sheikh Hasina was removed as prime minister and fled to India in August following deadly protests.
Yunus pledged reforms and said the poll could be delayed until 2026.
The two women's feud, known as the "Battle of the Begums" using the South Asian term of respect for a woman of high rank, has loomed over Bangladeshi politics for decades.
Khaleda has long suffered from liver cirrhosis, heart problems, diabetes and arthritis.
Her legal troubles under Hasina's government, including a 17-year prison sentence in corruption cases, were denounced by her party as politically driven.
She was released in 2020 on condition that she would not travel abroad.
