I used to do a terrible thing, I'd buy beautiful skeins of hand-dyed yarn and rush home and wind them into super tight balls by hand. I now have a ball winder and a lot more sense. I'm rewinding these tight balls into loose ones using the winder. If I leave them to rest like that will the tension of the yarn be restored? Is there anything else I should do, like soak them in water?
This is a question that comes up occasionally on the Ravelry forums, and the general consensus is that soaking will help with yarn that has lost its tension from being wound into too tight of a ball. It may work better or worse depending on the kind of yarn, so it might be best to test it on one ball (or one ball of each type that you have) before committing to a whole batch.
But don't soak the yarn while it's wound into balls. First, put your yarn up in hanks. Yarn balls would take a long time to dry, and they could get moldy. The easiest way to wind a hank is to use a yarn swift. If you don't have one, this question has some good advice: How to wind a hank of yarn without a swift?
Be sure to tie off the hank before taking it off of the swift, or whatever item/person you have it stretched out on. I recommend tying it in four places, and weaving each tie back and forth through the yarn several times. That will prevent it from turning into a terrible, tangled mess when you take it off the swift. This blog has good photo illustrations of the process.
Soak the yarn using the same process you would use to hand-wash a delicate knitted/crocheted item. Use cool to warm water, whatever is appropriate for the on fiber type. Use a gentle detergent, such as Dawn dish soap or a basic shampoo without any conditioner mixed in. If there's any concern about the dye running out of the yarn, wash different colors separately.
Let soak for 20-30 minutes to make sure the fibers get fully saturated and have time to relax. Gently squeeze the yarn hank in the soapy water, then in rinse water. Take care not to tangle it.
Squeeze out as much water as you can by hand, without wringing or twisting. Then squeeze between clean, dry towels. Hang it up to dry. Optionally, put a fan on it or hang it outdoors in a gentle breeze to help it dry faster.
When you're ready to re-wind it into balls, stretch the hank back out on the same device you used to wind the hank in the first place. Make sure it's secure and as un-tangled as possible before removing the ties.