Stephen McFaul was part of a group of 135 foreign oil workers kidnapped by 30 Islamist militants at the In Amenas BP gas field in the North African country.
A PSNI spokesman has confirmed the 36-year-old electrical engineer, who dramatically escaped amid intense fighting between the kidnappers and Algerian troops last Thursday, has returned home.
Mr McFaul told his family he was in one of five jeeps containing hostages and captors, which were on the move when Algerian Special Forces launched a military operation.
It is understood four of the vehicles in the convoy were bombed while the fifth - which was carrying Mr McFaul - crashed.
He managed to escape from it and made it to a safe camp. It also emerged that Semtex explosives had been strapped around his neck.
"Stephen and his family have been through a very traumatic situation over the past few days," the McFaul family said in a statement released after his return.
"Stephen wishes to have time to reflect on what has happened to him and is very aware that he has lost friends and work colleagues in Algeria."
His thoughts are with those who have lost loved ones and with those families who are still awaiting news.
McFaul family statement
Algerian authorities said 37 foreign hostages were killed in the terrorist attack.
On Monday Prime Minister David Cameron confirmed that three British nationals were known to have been killed and a further three are feared dead.
Mr Cameron said his deepest condolences were with the families of the victims. He told MPs work to clear the site of potential traps was continuing.
He said: "Now our most vital work is bringing home those who died. An international team of British, American and Norwegian experts is in close co-operation with the Algerian ministry of justice undertaking the task of formally identifying their bodies.
"We want this process to happen as swiftly as possible but it will involve some intensive forensic and policing work and so may take some time."
Mr Cameron said the "swift" international evacuation effort of the survivors has now been completed.
"The last British flights out on Saturday night brought not only the remaining freed Britons but also Germans, Americans, New Zealanders, Croats, Romanians and Portuguese.
"As of yesterday all 22 British nationals caught up in the attack who either escaped or were freed had been safely returned to Britain, to be debriefed by the police and, of course, reunited with their families."
Situated close to the border with Libya, the gas field is in the middle of the Sahara desert and is one of the most remote locations in the world.
An Islamic group claimed the attack was in retaliation for the French military intervention against al-Qaida terrorists in neighbouring Mali.
Mr Cameron promised that the threat posed by al-Qaida in the region would be at the top of the agenda for the UK presidency of the G8 summit, which will take place in Enniskillen later this year.
He told MPs: "We will work closely with the Algerian government to learn the lessons of this attack and to deepen our security co-operation.
"We will contribute British intelligence and counter-terrorism assets to an international effort to find and dismantle the network that planned and ordered the brutal assault at In Amenas."
A PSNI spokesman said police are assisting the McFauls "in a family liaison capacity".