Devils general manager Lou Lamoriello announced the signing Tuesday. The deal includes another $2 million attainable through a 40-games-played bonus, a source told ESPN.com's Pierre LeBrun.
Jagr, 41, will help New Jersey attempt to fill the massive void created when Ilya Kovalchuk stunningly elected to retire from the NHL and play in his native Russia's Kontinental Hockey League.
"I was talking to Lou even before Kovalchuk retired," Jagr said on a conference call with reporters Tuesday after officially signing with the Devils. "And after he retired, I think there was even more of an opportunity for me to play on the Devils' roster."
"I watched him play the last couple of years and I have never seen someone work so hard," Lamoriello told the Associated Press. "We know where he is in his career. He brings something. Everyone who has played with him the last couple of years and also the coaches have been complimentary toward everything he has done. There is no question he can help us on the power play.
"He is a well-conditioned athlete and we are happy with what he is going to bring."
Jagr scored 16 goals during the regular season in 2012-13, splitting time between the Dallas Stars and Boston Bruins. But he did not score a goal in 22 playoff games with the Bruins, leading many to believe he ran out of gas.
Jagr, however, noted that he played 105 games last season between Europe and the NHL, the most games he's ever played in a single season in his entire career.
"I would've loved to play for one team my whole hockey career, but there's not many players who get lucky like that," Jagr said.
Jagr ranks eighth all-time in points (1,688), 10th in goals (681), 12th in assists (1,007) and 34th in games played (1,391).
Jagr is no longer the elite player he once was, but the veteran is strong on the puck and can help on the power play. A Hart Trophy winner and five-time Art Ross Trophy winner, Jagr is 19 goals shy of 700 for his career.
Information from ESPNNewYork.com's Mike Mazzeo, ESPN.com's Pierre LeBrun and The Associated Press was used in this report.