Chalobah has previously been with the Hornets before, with the youngster appearing 42 times during the 2012-13 season, scoring five goals.
The player was on the fringes of the first team squad last season, and has now moved just up the road in north London to play his football.
Silva bring Chalobah back to Watford
Newly-appointed Hornets manager has made his intentions clear from an early stage that he is wanting to put his own stamp on the squad.
The 22-year-old had been with the Blues since 2005, but only ever made 10 first team appearances during that time.
His first loan spell was to Watford, and then he went and had spells with Nottingham Forest, Middlesbrough, Burnley and Reading before a period in Serie A with Napoli.
Youngster has a lot to offer Hornets
Chalobah has also represented England on the international stage, and has played for the Three Lions at five age groups since 2008.
The youngster, who has made 40 appearances for England Under-21s since 2012, can play in defence or midfield and will offer the side versatility.
Chelsea didn’t appear to want to let the player go, having offered him a new £60,000-a-week deal, but it wasn’t likely that he’d be guaranteed first team football.
That appeared to be the selling point for Chalobah, who has signed a five-year contract with the Hornets, who paid around £5m for the player, it is believed.
Silva will be looking to get the youngster integrated into the side this pre-season, and Chalobah may well make his mark and force his way into the side ahead of the opening game of the season against Liverpool, which is live on Sky Sports.