The 2006 show received a lukewarm reception
The 44-year-old received mixed reviews when he last presented Hollywood's top awards show in 2006, but organisers today called him a "terrific host".
"He is smart, quick, funny, and loves movies," said producer Gil Cates. "What else could one ask for?"
The 80th Academy Awards take place in Hollywood on 24 February, 2008.
Stewart was replaced by Ellen DeGeneres for this year's ceremony.
But, with the US presidential election set for November 2008, producers may feel the political satirist is the natural choice for next year's show.
'Home run'
Some critics were not kind to Stewart's performance in 2006, suggesting he had failed to bring the edgy satire of his US TV show to the Oscars.
Tom Shales, of the Washington Post, homed in on the comedian's "smug humorlessness", labelling him "a sad and pale shadow of great hosts gone by".
But film critics Roger Ebert and Richard Roeper raved about Stewart's performance, with Ebert calling it a "home run".
"I'm thrilled to be asked to host the Academy Awards for the second time because, as they say, the third time's a charm," said Stewart on Wednesday.
The Emmy award-winning presenter has also appeared in several movies including horror film The Faculty, Death to Smoochy and Big Daddy.
Stewart follows a long line of stand-up comedians who have hosted the Oscars, including Bob Hope, Billy Crystal and Whoopi Goldberg.
The Daily Show with Jon Stewart is broadcast by Comedy Central in the US and in the UK on digital channel More4.
Jon Stewart last hosted the Oscars in 2006. 
Jon Stewart is to return as host of the Academy Awards. It will be the second time he has hosted the awards, having first done it in 2006. The 80th Academy Awards ceremony will be presented at the Kodak Theatre on February 24, 2008.

When Stewart last presented the Oscars, he received mixed reviews. Tom Shales called him, "a sad and pale shadow of great hosts gone by." However, Roger Ebert called his performance a "home run". The 2006 awards performed poorly in terms of ratings. It attracted 38.9 million viewers, compared to 39.9 million last year when it was hosted by Ellen DeGeneres and 42.1 million when hosted by Chris Rock in 2005.

However, the producer for the Oscars, Gil Cates, said that, "He is smart, quick, funny, and loves movies. What else could one ask for?" Stewart is said to be thrilled to be asked to host the awards again, "Because third time's the charm."

Stewart is most famous as host of Comedy Central's ''The Daily Show''.