I think your best bet here is not to mention the previous job offer in your cover letter, because it could sound a bit pretentious (like hey everybody, listen, his Excellence is back and you owe me a job, remember?).
Instead, you could just mention your past internship and I bet they might retrace by themselves the fact that they offered you a job which you turned down to do higher studies, if they have a good HR department.
Once you get to the interview, then you'll be able to mention it in the flow of the conversation.
As for your cover letter, what you could do is to mention the name of the person who offered you a job as a reference, but only if at the time you made yourself totally clear about the reason why you turned the offer down, and this person understood this reason and didn't feel disappointed or kind of upset.