The 31-year-old, who currently represents French club Brive, will make the move to the Championship outfit at the end of the season.
"There has always been a strong Scottish influence at Newcastle Falcons and I am delighted to continue in that tradition," Blair told the club's official website.
"Newcastle has ambitions to challenge in the Aviva Premiership, and although there are still the playoffs to be played, they are in a good position to be promoted and to achieve this goal.
"I am really enjoying my time in France but I feel that playing with Newcastle Falcons will provide me with a rugby challenge that I have been looking for."
Blair made 85 appearances for his country.