Milford, 27, signed a one-year deal with the Rabbitohs for 2022 but when he was charged with three counts of assault in September, the NRL refused to register the contract.
The assault charges were dropped this week but the NRL delayed immediately clearing Milford’s return to play as two of the charges alleged violence against women.
The governing body launched its own investigation into the incident which was captured on CCTV.
The Knights on Thursday submitted an application with the NRL to sign Milford for the remainder of the season.