The 26-year-old spent five years at Wolfsburg, making more than 150 appearances for the Bundesliga club. He also has three international caps for Iran.
"I'm very happy to come and play in the Premier League," Dejagah told the club's website.
"I know Sascha Riether, (Fulham's German right-back] well and he told me very good things about the club."
Dejagah has signed a three-year deal with the Londoners.