Rushworth enjoyed a successful loan spell at Coventry during the club's promotion-winning campaign last season.
The 25-year-old made 46 appearances in the Championship and kept 17 clean-sheets as Coventry won the second tier title, convincing boss Frank Lampard to sign him on a permanent basis.
"I'm really happy, there's so many emotions," said Rushworth, who has signed a "long-term" contract with Coventry.
"There's excitement, I can finally relax knowing it's done and that I'm back with the boys and at a club I loved being at.
"I'm excited to have this new challenge in the Premier League and to be able to call this place home is a big thing I've been looking forward to."
Lampard added: "It's great to have Carl back with us on a permanent basis.
"He's a top professional, a great character and he had a huge impact on the team to help us get promoted last season."