Soudani, who has scored seven goals in 13 internationals, joined Dinamo after the club, who won a record eighth successive league title this season, acquired Chile forward Junior Fernandez last week on loan from German side Bayer Leverkusen.
"I am delighted to be here and while I firmly believe that I will blend in seamlessly, I also hope that we can qualify for the Champions League group stages again," Soudani said.
Dinamo drew one and lost five matches in the 2012-13 Champions League group stage.
Croatian media reported the club would also try to bring back former stalwarts Eduardo da Silva and Ognjen Vukojevic, who are Croatia internationals, to help them make more of an impact on Europe next season.
- Sports & Recreation