The 28-year-old skippered the team under former interim head coach Todd Blackadder last year.
Now the new management team, led by interim boss Henry Edwards, have called on the services of Paterson for the new campaign.
Paterson said: "It's an honour and a pleasure to be captain again.
"I really enjoyed taking on the responsibility and had great support from the senior players, especially Scott Murray.
"We felt frustrated at the end of last season that, as a squad, we didn't do as well as we wanted so that will spur us on to do better and it's great to have the chance to lead Edinburgh again."
Edwards has called on senior Edinburgh professionals to assist Paterson in the role.
He added: "We feel that Chris is a good ambassador and a skilled player who leads from the front and therefore the best man for the job.
"We also think it's important to have continuity in the group given the changes to the coaching staff.
"We will be looking for support from the other senior members of the squad, helping Chris with his duties and stepping into his shoes should international commitments arise."