The 26-year-old prop will link up with fellow internationals Ross Ford and Gavin Kerr in the Netherdale front row next season.
Scotland back-row forward Kelly Brown has also signed a new two-year contract with the Border Reivers.
Douglas said: "Teaming up with Ross Ford and Gavin Kerr next season will give us a pretty impressive front row.
"I have spoken with Frank Hadden and I have decided that, in the build-up for the World Cup, it's best for me to play in Scotland due to the amount of preparation that will go into the squad that is ultimately selected, of which I hope to be a part."
Douglas joined the Reivers from Harlequins in 2002 and made his first Scotland appearance in the November Test against Romania that year, and now has 41 caps to his name.