The Costa Rica captain made 14 appearances for the Premier League club this season, having arrived from Twente in 2011.
Ruiz won the Eredivisie with Twente prior to his switch to Craven Cottage but has now opted for a move back to the Netherlands to gain regular first-team football ahead of the 2014 FIFA World Cup.
And he has already revealed his intention to help Phillip Cocu's side, seventh in the league, to challenge for the Dutch title.
"I'm going to do my best for PSV," he told the club's official website.
"When the opportunity arose, I was interested. I'm really looking forward to coming to train.
"It's true that I did not have much (playing) time lately at Fulham, so I see this as a great opportunity for me. I want to get my confidence back, help PSV finish as high as possible and prepare for the World Cup."
Sporting director Marcel Brands revealed his delight at securing Ruiz's signature, after missing out on the player in the close-season.
"I've been there working on it last summer, when it failed," he said.
"This winter we have attempted again and it was still hard, until last week there was light at the end of the tunnel."
PSV also confirmed that the deal does not include an option to buy Ruiz at the conclusion of his loan, although Brands remains hopeful that an arrangement may be possible further down the line.
"That was too complicated for now, but in the near future. This is the first step, I hope there is a second coming," he added.
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