Hearts confirmed Wilson had joined on a six-month deal and could play against Clydesdale Bank Premier League champions Celtic on Saturday.
The former Rangers defender has struggled to win a first-team place at Anfield and has spent time on loan at Blackpool and Bristol City since leaving Ibrox in July 2010.
Wilson has made nine first-team appearances for the Reds and his spell at Bristol City saw him play just once, as an 89th-minute substitute against Middlesbrough in November.
Manager John McGlynn told Hearts News: "Danny is a quality player and someone we know a lot about.
"Even at such a young age, he brings a lot of experience and not only will he be a very good addition to our squad, he will be a good influence on the young players we have here.
"He has been playing regularly down south so fitness won't be a problem, and hopefully it won't be long before we see him in a Hearts shirt."
The centre-back's arrival comes as Marius Zaliukas prepares to serve a suspension at Celtic Park.