"He's the greatest foreign player ever to sign for a Brazilian club," Botafogo president Mauricio Assuncao told Reuters in a telephone interview after the club made the official announcement on their website.
"He is really not coming for money. He is a player driven by challenges and he told me that Brazilian football is where he can play at a high level for another two years. He is not coming only to visit," Assuncao added.
The Dutchman, who ended a 10-year spell with Italian giants AC Milan earlier this month, has a Brazilian wife and often spent holidays at a beachfront apartment in Rio de Janeiro, local media reported.
The midfielder won two of his four Champions League titles with Milan and was one of several older players to leave the Serie A club at the end of last season.
Seedorf, who also had stints at Real Madrid, Ajax and Inter Milan, will be presented at Botafogo next weekend with the club hoping his experience can help win a major title for the first time since they lifted the Brazilian championship in 1995.
Botafogo are currently eighth in the 20-team Brazilian league after six matches.