Ian Domingo, from Dumfries, had been in London for a ceremony to mark the 100th anniversary of the campaign in which his grandfather was killed.
His suitbag, containing badges commemorating service, was taken from the Virgin service from Euston.
Elaine Higgins, from Barrow-in-Furness, had picked up his bag by accident.
She had attended the same remembrance ceremony and had travelled back in the same carriage as Mr Domingo but had unwittingly taken the wrong suitbag and simply put it back in her wardrobe.
Mr Domingo contacted British Transport Police (BTP) to report it missing and an appeal was launched to track down the missing bag.
Ms Higgins was tipped off by friends about the missing suit and badges adding she was left "dumbstruck" upon looking in her wardrobe.
Her 18-year-old son Aled Jones was killed in Bosnia in 1996 and she had been attending the remembrance ceremony as part of her involvement with the Soldiers, Sailors, Airmen and Families Association (SSAFA ) Bereaved Families Support Group.
She said: "I immediately felt for Mr Domingo as I had been wearing Aled's medals at the ceremony but took them off my suit - I knew what it would have felt like.
"I was dumbstruck for a moment when I unzipped the bag and then went to tell my husband we had Mr Domingo's suit.
"I was mortified for him, especially as I knew it had the medals on.
"We'd just picked it up and put it straight in the wardrobe, not even thinking to check the contents."
She added that she felt obliged to meet Mr Domingo in person to "apologise" adding "we can laugh about it now they're reunited but it must have been awful for him thinking he might not see it, or the badges, again".
The pair both praised the work of BTP and the lengths investigating officer PC Gez Cooper went to to have the suit returned.
Mr Domingo said: "I knew straight away from speaking to PC Cooper that he would leave no stone unturned trying to find my suit. I really can't thank him enough.
"He went to so much trouble for me."
PC Cooper added: "It's all in day's work - as a BTP officer the railway is our community and we care about the people who use it."
The Gallipoli campaign was an allied operation which aimed to force the Ottoman empire out of the war.
More than 131,000 allied and Turkish troops died in the battle, including 11,400 Anzac (Australian and New Zealand Army Corps) and 25,000 British soldiers.
Pin badges have been returned to a fallen Gallipoli soldier's grandson whose luggage was mistakenly taken from a train.