Apart from a six-month loan spell at PSV Eindhoven last year, the 29-year-old attacking midfielder spent four seasons at Fulham, the last in the second tier of English football.
Ruiz played a key role in Costa Rica's run to the quarter-finals at the World Cup last year, scoring the winner in their 1-0 victory over Italy and in the 1-1 draw with Greece in the round of 16, a game his side won on penalties.
"It's a wonderful opportunity," said Ruiz on Twitter.
Sporting finished third in the Portuguese league last season but pulled off a major coup by signing coach Jorge Jesus from arch-rivals and champions Benfica.
(Writing by Brian Homewood in Berne; Editing by Peter Rutherford)
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