The Frenchman has penned a one-year deal with the option to extend his contract by a further 12 months, the club announced on Monday.
Abidal was a free agent after La Liga champions Barcelona decided not to renew his contract.
The 33-year-old, back playing following a liver transplant, returns for a second spell at the Ligue 1 side, after originally departing in 2002 to sign for Lille.
A statement on the club's official website read: "As Monaco FC is pleased to announce the signing of Eric Abidal for a year (plus another optional) from the 2013-14 season.
"(The) defender returns to his first club after thirteen years of experience at Lille, Lyon and Barcelona."
Abidal, who has appeared for France on 61 occasions, is the latest in a series of high-profile signings that include Radamel Falcao, James Rodriguez and Ricardo Carvalho as newly-promoted Monaco look to put together a team capable of challenging for the Ligue 1 title
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