Taylor enjoyed an illustrious career with Newcastle United making 194 appearances for the Magpies in the Premier League.
He later played for Portland Timbers in the MLS and Ipswich Town and Peterborough United in the English Football League.
The 32-year-old is the first new signing for the Phoenix under coach Mark Rudan as gear up for the 2018/19 A-League season.
Taylor said he was excited to sign with the Kiwi outfit.
"As soon as I was aware of the interest, I knew it was an opportunity that I couldn’t pass up," Taylor said.
"I was here in 2014 as part of the Football United Tour when we played in Dunedin and Wellington and loved the country then.
"I know that I am joining an exciting project under Mark as well as playing in one of the best leagues in the world in the A-League."
Taylor won the UEFA Intertoto Cup in 2006 before winning the Football League Championship in the 2009/10 season, both while at Newcastle United FC.
Rudan described Taylor's arrival as great news for both the club and football fans.
"Steven is a significant signing for the football club in what we are trying to create," Rudan said. "He brings a huge amount of experience and strong leadership.
"We expect Steven to be a success on and off the park."
Taylor will link with his new teammates this week and could make his competitive debut for the club against Bentleigh Greens in the FFA Cup Round of 32 on August 7th in Melbourne.

STEVEN TAYLOR AT A GLANCE 

Professional Playing Career
2017 Peterborough United - Coach: Steve Evans
2017 Ipswich Town - Coach: Mick McCarthy
2016 Portland Timbers - Coach: Caleb Porter
2003-16 Newcastle United - Coaches: Sir Bobby Robson, Graeme Souness, Glenn Roeder, Sam Allardyce, Kevin Keegan, Chris Hughton, Joe Kinnear, Alan Shearer, Alan Pardew, Steve McClaren, Rafael Benitez.
2009-10 Football League Championship 2006 UEFA Intertoto Cup
2003-04 Wycombe Wanderers - Coach: Tony Adams