Fulham finished sixth in the league and reached the play-off semi-finals, where they lost to Reading.
"Scott is a good physical presence and is a very capable defender, plus he adds a lot going forward," Huddersfield manager David Wagner told the club website (www.htafc.com).
"He shows good football intelligence to time his forward runs and can setup goals for teammates and scoring them himself."
Malone is the club's fifth recruit since Tuesday after the signings of forward Steve Mounie and midfielders Tom Ince, Danny Williams and Kasey Palmer.
(Reporting by Aditi Prakash in Bengaluru; editing by Amlan Chakraborty)
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