Scotland international Fraser has been a free agent since his Bournemouth contract ended in June, when he opted against signing an extension to play at the Vitality Stadium upon the restart of the Premier League season.
The 26-year-old winger has joined former Bournemouth team-mate Callum Wilson, who arrived at the club in a £20m deal on Monday.
Fraser said: "I'm absolutely buzzing for it - I came down to see the place the other day and it was all just good things; the manager, the place, the fans, the messages I've been getting.
"It was just a no-brainer, really, to play in such a big stadium with such passionate fans, and being back up in the north again is big as well.
"So I'm really looking forward to it and I just cant wait to show everyone what I can do, help the team and help us get back to where we belong."
Magpies' boss Steve Bruce added: "I'm delighted to bring Ryan to Newcastle United. We have held off big competition to get his signature and that says a lot about what this club has to offer.
"His ability and his contributions on the pitch speak for themselves and I'm looking forward to seeing him getting to work in a Newcastle shirt.
"He has wonderful chemistry on the pitch with Callum Wilson, which excites me, and I hope it excites our supporters ahead of the new season."
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