Justice Department investigators said the men, who have yet to stand trial, shot dead Espinosa and cellmate Raul Yap.
Superintendent Marvin Marcos and 18 other officers have been reinstated, police chief Ronald Dela Rosa said, despite still being on bail for the murder of Albuera town mayor Rolando Espinosa.
"They are back on normal duties" after serving a suspension period, Dela Rosa told reporters.
Justice Department investigators said the men, who have yet to stand trial, shot dead Espinosa and cellmate Raul Yap during a night-time raid on the jail in November last year.
But Dela Rosa said they were allowed to return to duty after investigators "tried everything, all the legal remedies were used, the functions of our justice system".
The officers' return comes just days after Duterte reiterated that he would not allow any policeman to go to jail for waging his brutal war on crime, specifically citing the Espinosa case.
In a speech earlier this week, Duterte said, "I will never, never allow a military man, a government man, a policeman to be imprisoned for doing his duty and obeying my order."
Duterte singled out Superintendent Marcos, saying he had not yet been found guilty.
"Give him back his job," he said.
Duterte, who took office a year ago, is already under fire from human rights groups for his brutal anti-drug campaign which has seen at least 3,200 people slain in police operations with thousands more killed by vigilante groups.
Opposition Congressman Gary Alejano said "the reinstatement of Superintendent Marcos et al. to active duty is the height of impunity."
"This gives a signal to the police and military that they will be protected by the president even if they violate the law and human rights," he said in a statement.
"While (Duterte) is still the president, let us expect that more killings will happen under the war on drugs and under his administration," he added.