Pietersen's turbulent relationship with the England and Wales Cricket Board soured dramatically last year, with the player's retirement from limited-overs cricket beginning a chain of events that saw him removed from the national team following an explosive press conference at Headingley and later an admission of "provocative" messages sent to opponents in the South Africa side.
Giles, England's new limited-overs coach, was on the periphery as a selector during the row but is glad the chapter is at an end, and he said: "He is fully signed up, he has signed his central contract and that is good news. The stuff with KP is history. It got out of hand but now he is back on board and playing as well as ever by the looks of it."
Some common ground was found in time for him to play a full part in England's Test series win in India before Christmas, albeit on a limited four-month deal.
Both parties have now agreed to upgrade that to a full central contract, with Pietersen joining 10 other senior players on terms that run until September 30.
Giles added: "It's great news. Whatever happened in 2012, we're moving into a new year now. It's great for me to have him here (in India). His experience in this side in this part of the world in invaluable."
Giles earned a reputation as one of the game's nice guys during his playing days but should a firm hand be needed in the dressing room in the future he is not afraid to apply it.
"We are all different but I will have the same principles as Andy Flower and if I think someone is out of line in the team I will tell them because the group comes first," he said.
"I've spoken already to Andy, but I wouldn't want to speak to him every day. I've got to be my own man and my own coach, but Andy has great experience at this job and he's very good at it.
"It is good for me to pick his brains and there are other experienced guys here in a big management team who I can take advice from."