Forsett and his agent sent out tweets on Tuesday indicating the move, before the Lions later made it official.
Forsett, who will turn 31 on Friday, worked out for the Lions earlier Tuesday. He has played in 102 games during his NFL career, rushing for 3,697 yards and 18 touchdowns for Seattle, Houston, Jacksonville and Baltimore.
Forsett spent the past two-plus seasons with the Ravens, gaining a career-best 1,266 yards with eight touchdowns in 2014. Baltimore released Forsett earlier this month after he lost his starting job to Terrance West.
The Lions had a need in the backfield after losing starter Ameer Abdullah to injured reserve last month. Rookie Dwayne Washington is dealing with an ankle injury; he missed Sunday's win over the Eagles.
The Lions released linebacker Steve Longa to make room for Forsett. In other moves, the team also re-signed offensive lineman Brian Mihalik to the practice squad and released veteran defensive end Wallace Gilberry (abdomen) from injured reserve.