Brian Tovin said he found the ring in 40 feet of murky water.
"When I shined my light on it, I said, wow, this is the first time I've ever found jewelry underneath the water," he said.
The initials RLP and the name of a nearby school, the College of Charleston, were inscribed on the ring, CNN reported.
Tovin called the college's alumni association and determined that only two people graduated in 1974 with those initials, and that one of them was a female.
He eventually connected with Phillips' son on social media and returned the ring.
Tovin, who is battling cancer, was unable to speak about the ring, but his wife, Nancy, said he lost it while boating two weeks after receiving it.
"Losing it in the river, we never thought we would never, ever, ever see it again," she told CNN.