The 29 year-old, who arrives on a free transfer following his release from Chelsea, becomes Mark Hughes' eighth summer signing.
Hughes hailed the arrival of the double Champions League winner and told the club's official website: "I am delighted to bring a player of his undoubted quality to the club. He has got plenty of pace, great technical ability and all the attributes you need to be a top player.
"Jose has a lot of versatility which is something I like my players to have. He can operate right across the back and can also play the holding role in midfield.
"He's another Champions League winner, the third in the squad now with Park Ji-sung and Djibril Cisse, and will add invaluable experience to the group.
"His experience is really important to us. He understands the Premier League and he understands what it takes to win games. He has got a winning mentality and that is what I want to have around the place."