The 35-year-old midfielder joins after leaving Panathinaikos and told Fulham's website he was excited to be plying his trade in England.
"I'm delighted to have signed for Fulham Football Club and I am excited by a new challenge in England and the Premier League," Karagounis said.
"I'm looking forward to working under Martin Jol and playing alongside some fantastic players at this club."
Fulham's midfield stock had been depleted during the transfer window with manager Jol losing Moussa Dembele and Clint Dempsey to London rivals and his former team Tottenham Hotspur.
Karagounis, who has also played for Inter Milan and Benfica, was part of the Greek team which won the 2004 European Championship in Portugal.
He is the joint highest capped player for Greece with 120 appearances.
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