The couple – who are expecting their second child together – have turned their backs on the US and moved back to the UK so their four-year-old son Alastair can be educated in Britain.
The family has moved into their mansion in Epping, Essex, and the youngster has been enrolled in a school in the nearby village of Coopersale.
A source told The Mail on Sunday newspaper: “Rod and Penny were both ready to come back to Britain. They both dropped Alastair off at school for his first day and were very proud parents. Penny was pretty emotional she can’t believe how quickly Alastair has grown up.”
Rod – who has lived in Los Angeles for much of the last 30 years – and Penny now intend to stay in the UK permanently but will keep their Stateside home for vacations.
It is believed Essex-born Penny wanted to move back to England so she could be close to her mother.
The source added: “Alastair will have an international upbringing but they are staying in the UK to be near Penny’s family. Her mother especially wants the chance to see more of her grandchildren. Rod and Penny also want their kids to have a traditional British upbringing.”
Rod has six other children from previous relationships – Kimberley, 30, and Sean, 29, by his first wife Alana Hamilton, Ruby, 23, by model Kelly Emberg and Renee, 18, and Liam, 15, with his second wife Rachel Hunter.
His eldest daughter, Sarah, 46, was born when he was just 19 and was brought up in a children’s home until she was four, before being adopted.
All of his older children apart from Sarah were raised in Los Angeles.
The 65-year-old singer and Penny, 39, announced they were having another child together in August.