The 22-year-old left the Steelmen after five years at the end of the season, after two years of injury hell at Fir Park.
The full-back, capped once for Scotland, had been on trial at Sheffield United, but has elected to stay north.
Saunders joined Motherwell from Queens Park in 2008 and was capped for Scotland in a 3-0 win over the Faroes in 2010.
An Achilles tendon injury forced him to miss the majority of the 2011/12 season, before a knee operation also restricted his appearances last term.
"Steven is a highly rated defender and was attracting a lot of attention from other clubs. We are delighted he has chosen to join Ross County," manager Derek Adams said.