The concerts will be held on July 3 and 4 and are part of his award-winning Farewell Yellow Brick Road: The Final Tour.
Sir Elton, who is Watford’s honorary life president and has a stand named after him at Vicarage Road, last performed at the stadium in May 2010, with the performance raising £600,000 for the club.
“I simply had to play Vicarage Road a final time as part of my Farewell Yellow Brick Road tour,” said Sir Elton.
“My relationships with the club, with the fans, the players and the staff over the years have meant the world to me. Through the good times and the bad, Watford has been a huge part of my life.”
Watford season-ticket holders and regular match ticket buyers will have priority for purchasing tickets for the homecoming shows.