This was an obvious choice for the franchise. The film would have been incomplete without her in it. The Hobbit is turning out to be the next big money spinner for the studio. Peter Jackson also got several other stars to join the franchise once again.
Cate will be playing the role of Galadriel in at least one of the two Hobbit films. It is still not certain if she will be in both of the films. There will be more development to the book to make some of the characters more pronounced this time round.
Peter Jackson has already his opinion on Cate and has said that she is his favorite actress to work with and he couldn’t be thrilled enough to have her on board once again. The rest of the cast is still yet to be finalized.