The 28-year-old signed with the Hornets as a free agent after his contract with Arsenal ended in June.
"There's been longstanding interest from Watford and as I was a free agent this summer I had lots of talks with clubs from England and abroad," he said.
"But I think this is the perfect place for me to come to, and that's what I took into consideration whilst talking to various teams.
"I'm really looking forward to showcasing my talents, being back out on the pitch and playing football, doing the thing I love most.
"I think this is the right place for me to be and I'm looking forward to it."