A year ago, I left my job for a new one. That didn't work out for several reasons, and my year contract ends soon. It so happens that my old employer is offering me my old job back (their initiative). I loved the people there and the organization has improved, so I'll probably accept.
I just have one doubt: say that at some point in the future I will be looking for work again, how will this look on my resume? How much of a red mark is it?
I would take it as a signal that you got along well with your old employer even after you parted ways the first time. That's a good thing.
If you had quit or had been fired from your current job, I would be afraid the same might happen with my company and you will be back with the old company as your fallback at the smallest problem, but a contract running out is a good reason to change employers and I cannot find anything bad about that.
I would not consider it a red mark. But hiring people is not exactly hard science, other people might think different.
If they are offering you a senior designation than what you had before then this will be good for you!
This will show you are reliable, capable, a team player and a smart person.
In your resume, you can just give a summary of what designation you were on earlier, and what designation you are now working on.
Also to your future employers, you can mention the positive side of it during the interviews.
Future employers will likely ask you what happened. This is very common, and I would do so if I saw this situation on the applicant's resume. Simply being truthful (something I recommend no matter the situation) and explaining that you left and they asked you back when the new contract ended, should be sufficient. Personally, I would be curious and think "there must be a reason that they asked this person back.".