Modi has been living in exile in the British Capital since his passport was revoked by the Mumbai Regional Passport Office in March 2011, five months after he was removed from IPL on charges of financial irregularities.
But a division bench of the Delhi court, comprising Badar Durrez Ahmed and Vibhu Bakhru, restored his passport setting aside the previous orders.
Following the ruling, Modi said in a statement: "It has been a long and hard fight and today, I stand vindicated. I have always believed in our legal system and finally justice has prevailed.
"Virtually every case that was based on falsehoods has not been able to stand up to our legal system and for that I am thankful.
"I have always maintained that I am keen to return to India and return I will sooner rather than later. But I will continue to fight the good fight for the sake of cleansing our beloved game of cricket and everything that continues to ail it."
Earlier this year, the 48-year-old BCCI-banned cricket administrator was elected president of the the Rajasthan Cricket Association (RCA).
Modi was also elected president of the Nagaur District Cricket Association for the fourth consecutive term this month.