The 33-year-old former Olympique de Marseille player gives the MLS club a formidable partnership with American international Michael Bradley in centre midfield.
Cheyrou, who parted ways with Marseille in October, brings a blue-chip resume to Major League Soccer. He helped Marseille win the French league title in 2009-10 as well as three consecutive French League Cup wins in 2010, 2011, and 2012.
At Marseille, the six-foot 175-pounder played in 37 Champions League games. In all, he has appeared in more than 400 French league games.
"Benoit's vision and his ability to distribute the ball are two very distinct qualities that have made him such a successful player throughout his career both domestically in France and in European competition," Toronto FC general manager Tim Bezbatchenko said in a statement.
"He has a wealth of experience and success and is another important piece that complements the ones we currently have in place. We are very excited to bring him to Toronto FC."
Toronto head coach Greg Vanney, while at SC Bastia, played against Cheyrou in France.
Cheyrou adds to an impressive Toronto FC spine, marshalling the midfield with Bradley while newly acquired Polish international centre back Damien Perquis partners Scottish veteran Steven Caldwell at the heart of the defence. New designated players Jozy Altidore and Sebastian Giovinco, who is expected in July, will lead the attack.
All but Bradley and Caldwell are new additions this season.
Toronto has been clearing salary cap space and loading up on allocation money to find the resources for Perquis and Cheyrou, as well as a new deal for striker Luke Moore.
In recent days, Toronto sent midfielder Kyle Bekker to FC Dallas and winger/forward Dominic Oduro to Montreal — both for allocation money. Combined the two made almost US$330,000 last year.
The MLS salary cap was $3.1 million last season with each designated players over the age of 23 counting just $387,500 against the cap. Toronto's actual number will be closer to $20 million this year and that's with a pro-rated 2015 figure for Giovinco.
Toronto still has work to do to meet roster compliance, with four designated players — one over the limit. Brazilian striker Gilberto, currently at home awaiting his fate, is the odd man out.
Toronto, practising under the bubble this week at its north Toronto training centre, heads to Orlando on Sunday to continue training camp. Cheyrou is expected to join the team there.
Named to the Ligue 1 team of the year in 2007-08, 2008-09 and 2009-10, Cheyrou made 304 combined appearances for Marseille in Ligue 1, Champions League, UEFA Cup/Europa League, French Cup and League Cup.
His Marseille contract was terminated by a tribunal after an apparent fallout with coach Marcelo Bielsa.
"I'm very excited to sign for Toronto FC," Cheyrou said in a statement. "I cannot wait to wear the jersey and join my new teammates."
Cheyrou has represented France at the U-19, U-20, and U-21 levels. He earned a call-up to the French national team in February 25 2010 but has yet to earn a cap.
He is the brother of French international Bruno Cheyrou, who played for Liverpool among other clubs.
Toronto finished out of the playoffs for the eighth straight year last season with an 11-15-8 record.
Follow @NeilMDavidson on TwitterSuggest a correction