Back-rower Chris Houston has re-signed with Newcastle for the next two NRL seasons a week after having drug supply charges against him dismissed.

The 25-year-old stood himself down in March after he was charged with four counts of supplying cocaine and ecstasy, but the case was dismissed in Newcastle Local court last Friday.

He will officially rejoin the Knights squad when they return from their Christmas break on January 4.

Houston played 47 games for Newcastle in 2008 and 2009 and was called up as the NSW Blues' 18th man for Origin III last year.

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