The Swedish midfielder was a free agent after being released by Sunderland following their relegation from the Premier League.
Larsson, who has spent his entire career in English football having moved to Arsenal as a schoolboy, made more than 200 appearances for the Black Cats in his six-year spell at the Stadium of Light.
The 32-year-old will now line up against Sunderland in the Championship this season after becoming the Tigers' sixth summer signing.
“I’m delighted to be here and I am really looking forward to this fresh challenge," he said.