Duff played for Hodgson at Blackburn Rovers and the Fulham gaffer is looking forward to be working with the 3o-year-old winger again.
Hodgson told the club’s official website: “I am delighted to add a player of Damien Duff’s calibre to our squad, and welcome the further midfield options he provides us with.
“I have known Damien for over a decade since he broke into the first team at Blackburn when I was manager, so I’m fully aware of his qualities and I am looking forward to working with him again.”