McAuley, 38, left West Bromwich Albion after they were relegated from the Premier League last season.
"Speaking to the manager in the last week or so, that's something I can bring to the project".
"The opportunity to come and play at this famous club is fantastic", McAuley told RangersTV. My family support the club as do I. The street I was born on, the kerbs were painted red, white and blue. "The street I was born on (in Northern Ireland), the curbs are painted red white and blue so to get the opportunity to come and play at this famous club is awesome".
The 79 time capped worldwide has been a regular fixture in the premier league, and represented Northern Ireland at Euro 2016, so he will add a wealth of top level experience to Steven Gerrard's side.
"It is up to me to challenge them and to try to get in the team, but also to help develop them as well as they are the future of the club and the means to moving forward as well".
He becomes Steven Gerard's 15th and final signing of his first summer in charge.
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"Im delighted to be here and fell very honoured and privileged to be here".
He began his career with Linfield and went on to have spells in his native Ulster with Ballyclare Comrades, Crusaders and Coleraine, before earning a move to England, and Lincoln City in 2004.
In May 2011, he moved to Premier League West Brom, and he would go on to spend seven seasons with the Midlands club, and make 203 appearances in England's top flight.
The highlight of his worldwide career came when he netted Northern Ireland's first goal at a tournament in 30 years in their 2-0 defeat of Ukraine at Euro 2016.
The defender will now join up with his new Rangers team-mates when he returns from global duty following the upcoming double header with Bosnia & Herzegovina and Israel.