Oram, 34, will link up with the county in June for the short format of the game after playing in the IPL for Mumbai Indians.
He will join forces with Sri Lankan batsman Thilan Samaraweera who is the county's overseas signing for the entire 2013 season.
Oram has played for the Black Caps for the past 11 years but was released from his contract with New Zealand Cricket in 2012 to focus his attention on Twenty20.
Worcestershire's director of cricket Steve Rhodes said: "Jacob's Twenty20 experience, which he has gained from global competitions, is a major plus factor in our desire to have a successful campaign.
"He can bowl at the start, middle or end of the innings and can clear the ropes as a batsman, so our supporters will enjoy watching his exciting performances."
Oram said: "The opportunity to play for Worcestershire in this season's competition was something I could not turn down.
"While I have never played county cricket, it has always been a goal of mine, so I am very excited at the prospect of representing the club."
Oram also played for Chittagong Royals in the Bangladesh Premier League this winter.
- Sports & Recreation
- New Zealand Cricket
- Mumbai Indians
- Thilan Samaraweera