The Nigerian full-back has become Mark Hughes's first addition as manager of Rangers.
"I have known of him for a long time and admired him from afar," Hughes told the club's official website. "To get him now is a fantastic coup and a real statement of intent that we can attract the quality of player that he is. I am looking forward to working with him.
"He has got great ability, a good reputation in the game and a great personality.
"He plays with a smile on his face and I think QPR fans are going to enjoy seeing him play for us."
Taiwo joined Milan in the summer on a free transfer from Marseille.