Thompson, who came through the youth ranks at SkyBet Championship side Blackburn Rovers, had a taste of National League football last season during a brief loan spell with Barrow AFC.
The 22-year-old has become the first player to be contracted with Gateshead for next season, following a turbulent spell off the field, which has seen a protracted takeover collapse.
Speaking to the club’s official website, the Newcastle-born midfielder said: “It’s amazing to be home. I haven’t lived up here in six years or so, it’s great to be back and local.
“Fans often warm to the local lads and hopefully I can do that here with my performances.
“I’m athletic and like to use my pace, be direct with my first touch and beat my man.
“I don’t like to sit back and relax. I just want to get on a contribute some goals and assists for the side.”
Gateshead have also agreed on a new one-year deal with defender Fraser Kerr.
The Scottish centre-back signed for The Heed in July 2017 and went on to make 38 appearances over the 2017/18 campaign, scoring one goal.
Gateshead boss Steve Watson said: I`m over the moon to have Fraser tied down for next season.
“He`s one of the three main players who`ve been patient that I wanted to keep, so I`m happy to get the first one over the line”.
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