The deal is reportedly worth up to $3.75m (£2.2m) including incentives, while it is understood that DeCoud will receive $500,000 (£300,000) as a signing bonus.
The 29-year-old spent six seasons with the Atlanta Falcons having been chosen in the third round of the 2008 Draft, and Panthers coach Ron Rivera was "pleased" to have added an experienced player to his secondary.
"Thomas provides a veteran in the secondary who is familiar with the NFC South and has been a very solid player. We are pleased to add him to a safety group that has good experience and production," Rivera said in a statement.
DeCoud recorded 507 tackles and made 14 interceptions for the Falcons, starting all but two games during his time there and making the Pro Bowl in 2012.