The cloth was found in the garage of one of three teens who took it from the church in the Abruzzo region, ANSA reported.
Police are still looking for a few missing gold threads.
"These three boys have our forgiveness and that of Pope [Francis]," said Bishop Giovanni D'Ercole of L'Aquila, who put the cloth back together.
The three teens, who are known drug addicts, were released after telling police where to find the cloth.
They could still face charges, police said.
The cloth, which was taken from the Church Saturday night, is one of three blood relics that John Paul II donated.
More than 50 officers were searching for the relic before it was found.