The 32-year-old Republic of Ireland international has been released from his two-year contract at Greek side PAOK Salonika and becomes Barnsley's third signing since the return of Danny Wilson as manager.
"It's going to be a good experience, hopefully I can bring something to the team that will help us survive this year," Lawrence told the club's official website.
"I missed the football here when I left (for Greece) and I'm looking forward to getting back into the thick of it.
"I watched the Championship in Greece on Sky and it gave me fire in my belly again to come back.
"I've had good experiences here with other teams, I just hope I can have that with Barnsley."
Lawrence began his career at Mansfield before a £150,000 deal in 2004 took him to Sunderland, where he made 80 appearances.
Stoke paid £500,000 for him in January 2007 following an initial loan spell and he made over 110 appearances for the Potters.
He joined Portsmouth in 2011 and had a loan spell at Cardiff at the end of the 2011/12 season before embarking on a new adventure in Greece.
Wilson has already brought in Stoke's USA international winger Brek Shea and Liverpool right-back Ryan McLaughlin on loan since replacing David Flitcroft as boss in mid-December.