The 80-year-old Lovejoy star first featured in the Dales in 1997 when he said he appeared "as a tramp", but this time around he will appear as the ageing father of another new cast member, former Hollyoaks actor James Redmond.
Sutton said: "It's great to be back in Yorkshire and I have fond memories of filming the Beiderbecke trilogy in the same building as Emmerdale is now filmed."
His character, William, appears when Ruby Haswell, played by Alicya Eyo, applies to work as his carer but does not realise he is the father of her former boyfriend Seb, played by Redmond.
William is described as having quite an "old fashioned" attitude and will initially make things very difficult for Ruby.
Both Sutton and Redmond will appear on screen from the end of February.
Redmond said: "Having taken a five-year break from acting to concentrate on stand up comedy, I am really looking forward to getting back on the horse.
"It will be great to join the cast of Emmerdale and Seb will be my first time playing a northerner."
Emmerdale Series Producer, Kate Oates, said: "We're delighted to have Dudley and James filming with us. Their wealth of acting experience makes them great additions to the show."