The contract is a two-year, $4.1 million deal with just $350,000 in guarantees, according to a source.
The New York Jets had scheduled a visit with Rackers on Tuesday, but the Texans intercepted him along the way and struck a deal.
The Texans plan to bring Rackers and Kris Brown to training camp this summer as the two kickers stage an open battle for the job.
Rackers, who played for Cincinnati his first three seasons, made 17 of 20 field goal attempts last season. He has made more than 78 percent of his field goals in a 10-year career.
The 33-year-old Brown scored 106 points last season, but he missed field goals that could have forced overtimes in some key Houston losses. He also had field-goal attempts from 35, 28 and 26 yards blocked.
Houston finished a franchise-best 9-7 in 2009.
Information from ESPN NFL Insider Adam Schefter and The Associated Press contributed to this report.