Former Minnesota Vikings star
That means Peterson is poised to face the Vikings in his first game during the opening round of the 2017 NFL season, with the Saints visiting Minnesota on September 11.
"I am excited to be joining the New Orleans Saints," Peterson told ESPN.
"I'm really looking forward to this opportunity. Most importantly, I chose this team because it just felt right within my spirit."
Saints coach Sean Payton spoke of his excitement at recruiting Peterson.
"It's rare and unique to have the opportunity to add a Hall of Fame player to your roster," Payton said in a statement.
"His career has been top-notch and speaks for itself. We think he will be an excellent fit in our locker room and in our offense."
Peterson was released by the Vikings in February after 10 seasons in Minnesota.
He had been linked with various teams including the Oakland Raiders, New England Patriots and New York Giants, before eventually landing at the Saints.
Peterson missed most of the 2016 season after suffering a serious knee injury.
He missed almost the entire 2014 campaign through suspension amid allegations of child abuse after it emerged he had whipped his four-year-old son with a tree branch.
In 10 seasons with the Vikings, Peterson rushed for franchise records of 11,747 yards and 97 touchdowns in 123 games.
In 2012, Peterson came within eight yards of Eric Dickerson's single-season rushing record of 2,105 yards set in 1984.