Garner had his contract with the Hornets cancelled on Monday having spent the first half of the season on loan at Carlisle.
The 24-year-old's third spell with the Cumbrians brought eight goals in 17 stars, including a penalty at Deepdale during the 1-1 draw with North End in November.
Lilywhites boss Graham Westley has secured Garner's services until summer 2014, with the option of a further year and he is available to make his debut in the Johnstone's Paint Trophy northern area semi-final against Coventry on Thursday night.
Meanwhile, Todd Kane and Anthony Elding have left Preston at the conclusion of their respective loan spells.
England Under-19 international defender Kane made the last of his five North End appearances in Saturday's 1-0 FA Cup defeat at Millwall before returning to Chelsea.
Ex-Stockport and Leeds striker Elding is back with Blue Square Bet Premier outfit Grimsby after failing to find the net in five outings for Westley's men.