"This is absolutely perfect for us and it is a win-win situation," Duffen told Hull's website.
"It means that Stelios can come straight back into playing for a quality Premier League football club and we get the addition of a player with his experience.
"Initially, we have signed him until the end of the season, but we would love to think that Stelios could be with us beyond that. I know his personal ambition is to play for the Greek national team at the 2010 World Cup and therefore it would make sense that he stays with us until then. But, like I say, initially it is a one-year deal."
City's interest in signing Stelios first became known during the summer and Duffen says there has been a constant dialogue between club and player ever since.
"We've been having a constant dialogue with Stelios. Obviously he and Phil (Brown) have known each other since their Bolton days and we had a huge admiration for him. I'm just delighted that circumstances have combined to mean that we now have an opportunity to bring him to the football club.
"We have got a lot of potential at this football club. We've got younger players, players who have played in all four divisions and players with a lot of experience.
"I never put an 'age label' on any player. The fact that Stelios is 34 is irrelevant. He may well be fitter than some players who are 29.
"The fact is, we know what he can do and what he has done in the past. He will bring a fantastic combination of not only experience, but ability as well. He'll give us an extra resource that we don't have at the moment."