McGregor recently rejected a contract extension at Hull City where he won Player of the Year for 2017/2018.
Gerrard said of McGregor: 'He is a vastly experienced goalkeeper who we feel can add to the options available to us now.
"I have played against Allan a number of times in my own career and I know just how fierce a competitor he can be". It's obvious that he is below the required level in the Premier League and it was hard to judge how he would have done in the club's promotion winning campaign a year ago as he underwent heart surgery and missed a lot of action.
McGregor played his youth football for the Scottish side before signing professional terms with the club.
McGregor's return places doubt over current No 1 Wes Foderingham's future.
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McGregor signed for then Premier League club Hull City in 2013 and, barring a spell on loan at Cardiff City, has been there ever since.
"I'm buzzing to be back, I can not keep the smile off my face".
The 21-year-old centre back impressed on loan at Bolton this year where his performances helped keep Wanderers in the Championship. 'When the chance came, it was a no-brainer and I am buzzing to be back.
The goalkeeper won eleven major titles with Rangers including league titles in 2009, 2010 and 2011.
"You need to win games and it doesn't matter who you are playing".
"We'll see, no final decisions have been made".