"It's a big club, a club with history, also a club with money," said Hiddink, who has also worked at PSV Eindhoven, Real Madrid and Fenerbahce.
"It was a difficult decision because I had the experience of (working) more (with) clubs and I had the experience, of course, last year with Chelsea, which I enjoyed very much."
Hiddink replaced the sacked Brazilian Luiz Felipe Scolari at Stamford Bridge in February 2009 and went on to salvage Chelsea's season with a 2-1 FA Cup final win over Everton in his last game in charge.
He believes current Blues coach Carlo Ancelotti will succeed where he fell short and go on to lead his Double-chasing table-toppers to the Premier League trophy this season.
"Yes, I think Chelsea will win the title, especially with Manchester United dropping points," he said. "When you see Chelsea playing against Villa, it shows there's a lot of confidence in this team."
Hiddink, too, predicts Ancelotti will be in charge of the west Londoners next season, despite suggestions that the club's Champions League quarter-final exit to Inter Milan may have cost the Italian his job in the summer.
"The club know they need a policy which is not changing every year or half-a-year for the manager's position," added Hiddink.
Watch the full interview with Guus Hiddink on Football Focus on BBC1 from 1215 BST on Saturday 17 April.
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