The former Hearts striker has promised goals to the Rosanero fans.
Pinilla said: "I wasted my talent too much in the past, but I have changed thanks to my family, who made me understand what is truly important in life.
"I feel happy and at Palermo I have the opportunity to show football's hierarchy that I belong here too.
"I am in good shape and have been training with the squad for a few weeks. It is the first real pre-season training I've had with a team in five years.
"I feel ready and do not fear the competition, as there will be room for everybody."