Republic of Ireland international Murphy, 32, was a free agent after his contract with League One side Coventry City expired at the end of last season.
He made 137 league appearances for the Sky Blues across three seasons and, in all competitions, he arrives at the club with more than 500 games under his belt.
Town manager Mark Robins said: “I am delighted that Joe has chosen to join Huddersfield Town; he brings added Championship experience and is a great personality on and off the pitch. We have previously stated that we desired to add some experience to the group.
“Along with Alex (Smithies), we again have two goalkeepers of high quality following the departure of Ian Bennett, who made a brilliant contribution to the Club during his four years.
“Joe has spent a large part of his career in the Championship and Premier League and joins us from a club where he was first choice and we feel that he will provide real competition for the starting goalkeeper position, which is something we are sure both he and Alex will relish.
“Having worked with him before at Coventry City I know what he offers and what he will bring to the club on the field and in the dressing room. He is also somebody that the club monitored for some time.”
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