"After stiff competition from a number of high-profile European clubs, I am exceptionally pleased that Mark has chosen to come to Fulham," Hodgson told the club's official website.
"His credentials on both the domestic and international arenas are impeccable which is reinforced by the calibre of clubs that wanted to sign him.
"We have some work to do off the field this summer to enable us to compete next season in the Premier League and to avoid the position we found ourselves in a short time ago.
"Therefore I am very pleased that Mark will be joining us and helping with the task ahead."