Speaking at a rally in Oran, around 430km west of the capital Algiers, on Thursday he said his message was directed at those who had been driven abroad because of their political opinions but who had not committed violence.
“If they want to return to their country, I would be the happiest of men if the Algerian people welcomed them with milk and dates” – traditional signs of hospitality.
Thousands of people, notably supporters of the Islamic Salvation Front (FIS) – left Algeria, many to Britain, France, Germany and the United States.
FIS was the main opposition group until it was banned in 1992 after it was set to win parliamentary elections and the military stepped in, cancelled the poll and took control of the country.
Last month Bouteflika announced a referendum in the troubled north African country for 29 September on a proposed “charter for peace and reconciliation” aimed at bringing an end to years of fighting.
Under the charter, authorities would halt legal proceedings against what they call extremists.
The uprising that erupted in 1992 is officially estimated to have claimed 150,000 lives, left thousands wounded, hundreds of people have vanished and are unaccounted for and done more than $20 billion worth of damage to infrastructure and property.