Hourihane, who signed for an undisclosed fee from Plymouth following two years as captain, is looking forward to testing himself at a higher level.
He told the club's official website: "Barnsley is a very appealing club for me to come to. It's a step up for me. I am a very ambitious footballer and I am looking forward to the challenge.
"I really loved my time at Plymouth, but when an opportunity like this comes up you can't turn it down. Barnsley were really keen on signing me and that was a good confidence booster.
"Barnsley's ambition go get back up to the Championship is something I want to be a part of. It's something I'll be striving to help the team to do and I'm looking forward to it.
"I didn't want to come to any team and leave a good club like Plymouth just to play League One football, I wanted to come to a club that had ambitions and wants to go places. Barnsley definitely fit that bill and promotion is the main aim."
The central midfielder is the Reds' third summer signing following the arrival of goalkeeper Adam Davies from Sheffield Wednesday and striker Kane Hemmings from Cowdenbeath.