Coached by Shaun McRae and captained by Bryan Fletcher and Peter Cusack, they competed in the National Rugby League's 2005 Telstra Premiership, finishing the regular season 13th out of 15 teams, failing to reach the finals.

In March, Souths life member Russell Crowe made the Rabbitohs the first club team in Australia to be sponsored by a film, when he negotiated a deal to advertise his movie Cinderella Man on their jerseys.

The Rabbitohs would be winless again until Round 5, when they defeated the Newcastle Knights 37–12 at Bluetongue Central Coast Stadium in Gosford, before a crowd of 16,162.

A week later they hammered Manly 44–6, and though they went on to lose three more consecutively after that (including a second to arch-rivals St George Illawarra Dragons), they bounced back to win 5 of their last 6, beginning with a 24–14 win over Cronulla at the Sydney Football Stadium, and highlighted with a spirited 16-14 downing of the North Queensland Cowboys at Dairy Farmers Stadium in Townsville.

Their reasonably strong finish handed the bottom place on the NRL ladder to the Newcastle Knights, therefore avoiding the horrible fate of receiving three wooden-spoons in a row.