The 24-year-old has agreed a two-year deal with the SPFL Championship club and looks set to be their number one again in 2015/16.
Oxley made 45 appearances for the Edinburgh side and kept 16 clean sheets as they finished second behind their city rivals Hearts, only to lose to Rangers in the play-offs.
The Yorkshireman also scored a goal on his home debut when a clearance from his own penalty box against Livingston bounced over Darren Jamieson at the other end and into the net.
Oxley leaves Hull without having made a first-team appearance for them, having previously been contracted to Rotherham United.
He is now aiming for promotion and told the official Hibernian website: “We’ve started something here and now we want to build on it.
“There were other options available but I wanted to continue to be a part of what the manager is building here.
“This season our aim is to hit the ground running and experience a winning start and the fact that we’ve got that continuity in defence will help us to hopefully do that.”
Manager Alan Stubbs has been negotiating with Oxley over the last few days and is pleased to bring him back to the Scottish capital.
He added: “Mark is a great age for a keeper and last season’s experience will stand him in good stead for the upcoming challenge. He will continue to get better.
“This is another piece in the jigsaw falling into place and another reason to get excited about the new season.”