Posh boss Darren Ferguson said: "He is a very good player, he went out on loan to Portsmouth last season and did well and he is a player that I have seen quite a few times now.
"He is a good size, a very good footballer and it gives us more strength in midfield.
"I know this is an area that we have got numbers in, but I think this offers something slightly different. It will allow us to put Michael Bostwick in at centre half, which is something that I have been thinking about for a while.
"It frees up more options for me because I think we need another centre half and this allows me to utilise 'Bozzy' there. That was a big attraction to me.
"George is highly thought of at West Brom and we are pleased to get him because a few other clubs were in for his services, but I know he has had conversations with Saido Berahino and he said how much he is enjoying his time with us and that tipped it for us. I am looking forward to working with him."