Elford, 28, has made more than 110 NRL appearances for Wests and Penrith, and normally operates at centre or wing, although has featured at stand off most recently.
"The Giants seem to be a club who are going places and I am looking forward to being part of that," said Elford.
"[Former Wests prop] John Skandalis signing for the Giants was a big factor in me joining the club.
"I already know [Giants hooker] Brad Drew from our time together at Penrith and he says Huddersfield is a really good place to be."
Giants coach Jon Sharp said: "He is a big physical player with a proven try-scoring ability.
"He's a Grand Final winner with Wests [in 2005] and I am expecting Shane to make a big impact in Super League."