But, just eight months on, the former England boss appeared to be on his way out amid claims he had clashed with owner Mike Ashley over transfer policy.
The club tried to dampen speculation by declaring on Tuesday that he had not been sacked, while the League Managers' Association (LMA) insist he has not resigned.
LMA chief executive Richard Bevan, who said he had spoken at length with Keegan on Tuesday evening, told BBC Radio 5 Live: "He is in a difficult position but he has not resigned.
"He'll be discussing important issues with the Newcastle board over the next few days."
Bevan refused to speculate on what the outcome of the meeting may be.
"I can understand there is an eagerness for more information on the problems," he said.
"But at this stage it is important that we let the parties communicate and it would be inappropriate for me to pre-judge any outcome or explain the issues much more at this particular point.
"I'm just saying he has not resigned, he will be working hard to communicate with the Newcastle board and we'll have to wait and see what the outcome is over the next few days."
Bevan added that the LMA would keep supporters, media and other stakeholders within the game fully informed of any developments.
Keegan's future came under the spotlight after he made his feelings plain over the Premier League club's summer transfer activity at a meeting on Monday.
Following those talks, he was again summoned by the hierarchy on Tuesday morning as rumours of his exit started to surface.
BBC Sport understands Keegan had at one stage left the club, although Newcastle issued a statement later on Tuesday, insisting he was still their manager.
"Newcastle United can confirm that meetings between members of the board and manager Kevin Keegan were held both yesterday (Monday) and today (Tuesday)," it read.
"Kevin has raised a number of issues and those have been discussed with him.
"The club wants to keep progressing with its long-term strategy and would like to stress that Kevin is extremely important, both now and in the future.
Maybe things went on that Kevin had no real say in... I wouldn't have had that
"Newcastle United values the effort and commitment shown by Kevin since his return to St James' Park and wants him to continue to play an instrumental role as manager of the club.
"For the avoidance of doubt, the club has not sacked Kevin Keegan as manager."
Several national newspapers have claimed that Keegan was finally tipped over the edge by Ashley's attempts to sell striker Michael Owen and midfielder Joey Barton without his approval.
Others seemed to think a rift between Keegan and executive director of football Dennis Wise was the reason for the latest crisis to engulf St James' Park.
Keegan's unhappiness with the club's relative lack of signings in recent weeks certainly appears to be a factor.
He had voiced his belief on Friday - after winger James Milner's £12m departure for Aston Villa - that he would have three or four more players at his disposal by midnight on Monday.
In the event, only striker Xisco and loan signing Ignacio Gonzalez arrived on Tyneside.
Portsmouth boss Harry Redknapp, who was approached to take over Newcastle when Allardyce was sacked, expressed sympathy for Keegan.
"I don't know what has gone on, I just feel sorry for Kevin Keegan because he doesn't deserve it. He deserves to be treated with the utmost respect," Redknapp told BBC Sport.
Newcastle fans gathered outside St James' Park on Tuesday to register their dismay
"He's a top man so hopefully he can get it sorted out but I honestly don't know what has gone on."
Redknapp revealed that had he taken over at Newcastle he would not have entertained the idea of working with a director of football.
"Maybe things went on that Kevin had no real say in," he stated. "I wouldn't have had that. I wouldn't have started that way. You would have done it my way or not at all."
Following news that Keegan's position was under threat, Newcastle fans flocked to St James' Park on Tuesday to register their support for the manager and protest against Ashley.
It was a very different reaction for Ashley back in June 2007, when he was deemed the club's saviour after completing a £135m takeover.
He then sacked Sam Allardyce as manager at the start of 2008 after a run of poor results and shocked the football world by bringing back Keegan for a second spell in charge.
In his first stint as manager, between 1992 and 1997, Keegan saved the Magpies from dropping into the third tier of English football and almost guided them to the Premier League title in 1997.
However, his relationship with Ashley was also not helped when in May he said he did not believe Newcastle could become a top-four club.
The Magpies currently lie 11th in the table after a promising start to the new campaign.
After drawing 1-1 with Manchester United, they beat Bolton 1-0 before losing to Arsenal 3-0.
KEEGAN'S SECOND SPELL AT NEWCASTLE
16 January: Returns to Newcastle to replace sacked Sam Allardyce as manager 29 January: Dennis Wise joins club as executive director (football), along with businessman Tony Jimenez vice-president (player recruitment) and Jeff Vetere (technical co-ordinator) 22 March: Newcastle record first Premier League win of Keegan's second reign as goals from Mark Viduka and Michael Owen result in them beating Fulham 2-0 at St James' Park 9 May: Keegan meets with club owner Mike Ashley after admitting Newcastle are "a million miles" away from being as good as title challengers Chelsea 11 May: After watching his side lose 3-1 to Everton on the final day of the season, Keegan declares he is targeting fifth place in the Premier League for the 2008-2009 campaign 15 August: Signs Fabricio Coloccini for £10.3m from Deportivo La Coruna 16 August: Denies James Milner would be sold to balance the books following the arrival of Coloccini 29 August: Milner moves to Aston Villa for £12m 2 September: Keegan reportedly on the brink of leaving the club after a meeting with Ashley
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