The 29-year-old impressed for Atletico Madrid between 2010 and 2015, but struggled during a short spell with Fiorentina and also found it difficult in the Premier League for the Hornets in the second half of last season.
The three-time Spain international has now returned to La Liga and has revealed that he wants to earn a permanent contract with Los Che, where he will spend an initial 12 months.
"I am very grateful for returning to La Liga, to a great side," Suarez told Valencia's official Twitter page. "Hopefully I can be here a lot of years at Valencia, it is what I want."
Suarez could make his Valencia debut in Monday's La Liga clash with Las Palmas at the Mestalla.