Manager Brian McDermott said: "This has been a long time coming, but good things come to those who wait."
Griffin added: "I had a good relationship with the fans and everyone at the club so I feel at home here and I'm looking forward to the season."
Griffin began his career at Stoke before joining Newcastle in 1998 for £1.5m.
He also had a loan spell at the Britannia Stadium, while at Portsmouth, before returning for a third spell after leaving Derby in 2008.
It is a rare thing for a club to sign a player in the full knowledge that every fan and member of staff will be delighted by the news
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The defender hopes he performed well enough during his loan spell to win over the supporters.
"The fans seemed to take to me so hopefully I must have done something right," he added. "They play a huge part, a football club is nothing without its supporters and that played a part in my decision, no question."
McDermott believes Griffin's is exactly the sort of player that his side needs.
"We're getting so much experience, a guy who has been captain of a team who won this league. He knows what is required over 46 games," he said.
"When games are getting hot he has the extra touch, he gives us that composure and he's going to remain very, very popular."
Source: BBC Sport
Source: BBC Sport