There will be extra funds for housing, studying abroad and social security, according to state television.
King Abdullah has been away from the country for three months, during which time mass protests have changed the political landscape of the Middle East.
There have been few demonstrations in Saudi Arabia.
Hundreds of men in white robes performed a traditional sword dance at Riyadh airport as the king's plane touched down.
He disembarked and queues of people waited to personally greet him.
The streets of the city had already been decorated with welcome banners and national flags.
The 86-year-old left for New York on 22 November and had two operations in New York to repair spinal vertebrae and a herniated disc.
After a period of convalescence at his New York home, the king flew to Morocco on 22 January and had been recuperating there since.
By that time, Tunisia's president Zine al-Abidine Ben Ali had become the first leader in the region to be ousted after weeks of mass protests - and he had fled to Saudi Arabia.
Egypt's President Hosni Mubarak was the next to go.
Health speculation
King Abdullah's health has been the subject of intense speculation, especially since the men tipped to succeed him are also elderly.
His half-brother Crown Prince Sultan - who is in his eighties and has been in poor health - has been in charge in his absence.
The monarch's imminent return was welcomed by the Saudi media.
"The king is the only pillar of stability in the region now," read the editorial in the English-language daily Arab News. "He is the assurance of orderly progress... in the Arab world as a whole."
Saudi television reported that Bahrain's King Hamad was also flying into Riyadh on Wednesday.
The small state on Saudi Arabia's eastern border has seen more than a week of protests and the Bahraini authorities were criticised internationally for their initial crackdown on demonstrators.
A facebook group called K.S.A Revolution is already calling for demonstrations on March 20th
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