The 30-year-old, who had spells with Jeonnam Dragons in South Korea and Malaysian side Selangor after leaving the Reds, said he was looking forward to returning to Australia.
"When you're looking to come back to Australia you put a list together of the clubs you'd like to join and the Wanderers were top of that list so to get the opportunity to play for Western Sydney is a huge honour as I know the fans are the best in Australia," Australia defender Cornthwaite said.
"It's exciting for me and my family. After six years playing in Asia I'm really looking forward to joining Wanderers at a good age where I can really contribute.
"I've been away from Australia for a while but I watched as much A-League as possible – generally a couple of games each weekend – and Western Sydney have been very successful and played some very good football – particularly last season.
"I'm looking forward to getting in, pulling on the Red & Black and getting to work as soon as possible."
Cornthwaite is the second Wanderers defensive signing this month after the club announced on 5 July that Spanish defender Aritz Borda had also signed a two-year deal with the club.