His disappearance was reported just days before Jordan Jacobs was due to return to his home in Lyneham, Wiltshire, for Christmas, and his family said they feared for his safety.
Police have released a picture of one of their officers with Mr Jacobs, and said they found him trying to apply for a diving job on Koh Phi Phi.
A screenshot of Facebook posts to his profile show him claiming he had not been in contact because he had not had internet access, and said his parents were "overreacting" because he had told them he was staying longer than expected.
"I was just wandering around here and had no idea. I feel pretty guilty and it’s very embarrassing. I will forever be known as the guy who went missing on his holidays," he added.
In an initial appeal on Facebook, the sister of 21-year-old Jordan Jacobs from Lyneham, Wiltshire, said he was last seen on one of the Phi Phi Islands near Phuket.
He had been offered a free ride with a local man from mainland Thailand, Emily Jacobs said - and the next day, he messaged his mother to say he would never see them again and was sorry he could not have said goodbye to them.
"He was upset and said that the man wouldn't let him leave. That he was scared of him," she added.
It turned out that the number he had called from belonged to a Cypriot tourist, who afterwards told the family Jordon had approached him wearing no shoes and without his bag at a restaurant - a statement backed up by the restaurant owner.
Ms Jacobs appealed to people to help share the story and bring her brother home safely.
Jordon had been travelling in Australia and south-east Asia since November last year, and was due to catch a flight home from Bangkok yesterday.
Fellow backpackers told the family he had met a local Thai man, aged in his 20s, at a launderette near their hostel in Krabi, on mainland Thailand.
There was no more contact until Monday morning where my brother appeared online, and after few attempts a I was able to speak to him on the phone using the Facebook wifi messenger.
The Foreign Office has confirmed that Jordan was located by local authorities on the popular tourist island of Koh Phi Phi.
A spokeswoman said: "Our embassy staff have spoken with him to check on his welfare and we will remain in contact with his family to provide any further assistance required."