Blanco to return to Mexico with Veracruz
Blanco played for the Red Sharks in 2004 when the team from the port city, who are now in the second division, were in the top flight.
"At this stage of my career there emerged the interest of some Mexico clubs for me to return to play at home. I will start a new stage with Veracruz," Blanco said in a statement.
The outspoken Blanco, known for his volatile temper and run-ins with coaches, joined Chicago in 2007 after playing for the Mexico City club America for most of his career.
He has had loans spells at Necaxa, Santos Laguna and Spain's Real Valladolid.
Blanco is hoping to go to his third World Cup in South Africa next year. He played at the 1998 and 2002 tournaments but was left out of the 2006 squad by Argentine coach Ricardo La Volpe.
He announced his international retirement earlier this year but was recalled when Javier Aguirre replaced Swede Sven-Goran Eriksson as coach.