Depends on what happens in Lord of Souls. If he gets trapped back in the sword, then it is a possibility. If not, then it's doubtful. But I'd like to see some of the other things that didn't make it from Morrowind into Oblivion to return, and not only as a part of daedric quests. I mean, Peryite and Spell breaker? Come on.
As for it appearing in Oblivion, that was necessary to foreshadow the plot of IC.