John Terry made 716 appearances across 19 seasons with Chelsea FC.
"It's a club I have admired from afar for many years," Terry said of the 1982 European Cup winners.
"There are fantastic facilities at Bodymoor Heath, Villa Park is one of the finest stadiums in the country and there's a good group of players here, with an experienced and successful manager in Steve Bruce.
"I can't wait to get started now and look to help the squad achieve something special this season."
Terry, who won 78 caps for England, played 717 games for Chelsea and won his fifth Premier League title in May.
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