The former Wales Under-21s captain was poised to join London Irish at the end of last season but performed a u-turn following the installement of Brian Smith at the Exiles.
The Ospreys quickly swooped to re-sign the back-row forward and Tandy was delighted with the capture.
"Tom coming back is massive for us, not just because he's a top player but also because of the amount of work he does behind the scenes," Tandy told the South Wales Evening Post.
"He puts in hours of work on line-outs, helping the coaches and educating the younger guys, trying to get better.
"Every time he goes on the field you know what you are going to get. He's going to struggle to get off that pitch because he's put everything into his performance. He is a huge asset."
Smith played in every minute of the Ospreys' regular season, only failing to come off the bench in the region's RaboDirect PRO12 final in Dublin.
The flanker is of huge importance to the Ospreys due to his willingness to get through the unglamorous 'donkey-work'. And the fact that he has not gained international honours he is available all year round.
"I appreciate the fight and effort those guys put in," said the Ospreys head coach.
"We are lucky in that the people who don't get so many headlines here just get on with their jobs and have great attitudes.
"There were a lot of tough calls made last season, leaving out Kahn Fotuali'i for Rhys Webb in the PRO12 final, for instance, and omitting Tom even though he had played in every previous league game in the season.
"Then there was being unable to find a place for Sam Lewis after his outstanding performance out in Aironi.
"But the great thing is the boys all accepted the calls, because they understand what being part of a squad is all about.
"Tom's response after the Pro12 final was particularly pleasing. He didn't get on but was just happy we'd won. There was no moaning and that told me a lot about the kind of professional he is.
"Guys like him and the others put the organisation before themselves. If you've got people like that you're on your way.
"Our squad might be thin in certain areas in terms of strength in depth, but the mindset and character boys like Tom, Sam, Kahn and Tom Isaacs showed at times last season was outstanding. It goes a long way to ensuring success."