Thompson agreed the deal over the weekend and will make the move when he returns from England's tour to Australia and New Zealand.
The 31-year-old said: "I am really pleased to be joining Leeds Carnegie at an exciting time for the club."
He added: "I spoke with (director of rugby) Andy Key and (head coach) Neil Back and have nothing but admiration for what they have done at the club already and what they plan to do in the future.
"It was a big decision for me to come back to the Guinness Premiership but it is a challenge I am looking forward to.
"In all honesty, I have got more nerves about coming back to the Guinness Premiership than I did about coming to France and I think that is a good thing. I am looking for a fresh challenge in my career and Leeds Carnegie is exactly right for me."
Back, who played alongside Thompson when England won the World Cup in 2003, said: "As a club we are delighted to have signed a player of the calibre of Steve Thompson.
"He is a world-class player who is still performing at the top of his game and he sees the move to Leeds Carnegie as a chance to improve even further."