Meppen-Walter, 19, pleaded guilty in February to causing death by careless driving and was sentenced to 16 months in jail and banned for three years after his Mercedes ploughed into a Nissan Micra killing a brother and sister.
His club at the time, Manchester City, terminated his contract but after serving his sentence Meppen-Walter wants to rebuild his fledgling career at Brunton Park.
"This was a difficult decision for us, as you can imagine," said Kavanagh, who accepts the club will be criticised.
"He comes with a heck of a lot of baggage and that's something that we really had to consider.
"He was involved in a horrible incident a year or so ago and two people died as a result of it.
"He was sent to prison and has now been released. Obviously you have to have it uppermost in your mind that two people did lose their lives and your thoughts are with them and their families.
"Also to be considered though, is the fact that he has served his time and I'm sure that it's something he wishes hadn't happened.
"There comes a point where he has to move on and it's then about who is willing to give him an opportunity.
"I have decided to do that and I'm hoping that he takes the opportunity and that everyone gives him a chance to put this horrible thing behind him so that he can make his way in the game again."
Kavanagh added on the club's official website: "I know it's something that we will probably get criticised for.
"I had to really think long and hard about this and you have to ask yourself at what point do you allow the individual to move on.
"The justice system has dealt with him and there are no two ways about it that he is still full of remorse and regret."
Meppen-Walter, who came through the Manchester City youth system, did not make a first-team appearance at the Etihad Stadium, but was included on the bench by former manager Roberto Mancini last season for a Champions League game against Juventus.
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