The 23-year-old, who was close to joining the Reds when a reported £8m bid was accepted last summer, will go up against the Merseyside outfit at Anfield on Sunday.
"It was hard to turn down Liverpool because I know Brendan [Rodgers]," BBC Sport quotes Sigurdsson as saying. "[Spurs] finished fourth last year and were unlucky not to get Champions League football, and you could see tonight that this is a great club with fantastic players.
"I'm really pleased I made that choice. There are so many good players here and hopefully we can be in the Champions League next season."
The North London outfit are currently third in the Premier League table.