City boss Nigel Pearson said: "Paul has all of the attributes you require to succeed as a footballer. He has tremendous spirit and I am delighted to have been able to bring him here.
"He is the sort of player who never believes the team is beaten. He breeds fear into defences and I am sure he will be a tremendous asset for us.
"He will give us everything and I am sure he will be a big favourite with the fans here once again."