The 32-year-old Uruguayan centre-back, who has been in talks with the Baggies this summer, is expected to complete his move today.
"The new arrival coming in helps bring more competition in the squad and we're going to need it because it's a long hard season," the 29-year-old told the Birmingham Mail.
"People are picking up knocks and the gaffer has stated before that he wants to bring in new players. It's only healthy for us.
"The players who have been talked about are good for West Brom. It shows how far we have moved forward."
Lugano has been capped 85 times for Uruguay.