The 37-year-old was released by Derby County at the end of last season, but was offered the deal at Upton Park after an impressive trial spell.
Hammers boss Glenn Roeder summed up the esteem that Lee is held in throughout the game when he told West Ham’s official website: "I am delighted that the Rob Lee deal has just been completed.
"He is with us for a year and he will be an invaluable member of our small squad, his ability and attitude are first class and he has integrated well.
"What is more, he has the utmost respect of his colleagues."