I have looked on the internet and can't find a clear process. Does it involve potassium iodide?

Yes. Have you looked on wikipedia as well?

Iodine - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Iodine#Solubility)


One of the most distinctive properties of iodine is the way that its solubility in water is enhanced by the presence of iodide ions. The dissolution of iodine in aqueous solutions containing iodide (e.g. from hydroiodic acid, potassium iodide, etc.) results from the formation of the I_3\ ^- ion. Dissolved bromides also improve water solubility of iodine.

So, you add water and some potassium iodide to the solid iodine and you have your iodine solution! :)