The France international, who underwent a liver transplant in 2012, made an emotional departure from the Spanish champions at the end of last season.
Now the 33-year-old has returned to his home country to sign for the promoted side, who have already spent vast sums on Falcao, James Rodriguez and Joao Moutinho this summer.
A club statement read: “AS Monaco FC is pleased to announce the signing of Eric Abidal for a year (plus another optional) from the 2013-2014 season.”
Abidal began his professional career with Monaco in 2000 before moving to Lille and then Lyon, where he won three league titles in succession.
The versatile defender then joined Barcelona in 2007, winning four La Liga titles, two Copa del Reys and two Champions Leagues.
Monaco are bankrolled by Russian billionaire Dmitry Rybolovlev and have been active in the transfer market since winning promotion to Ligue 1 at the end of last season.
As well as the aforementioned trio, Monaco have also signed midfielder Jeremy Toulalan from Malaga and defender Ricardo Carvalho from Real Madrid this summer.