McDonnell, 25, turned down a new deal at Craven Park and announced his decision to leave earlier this season, and had been expected to return to the NRL.
He said: “Hull FC is a good place to be, the club are moving forward and they have recruited well for next year so I know I’ve made the right decision.
“It took me a bit of time to settle in another country this year and the weather makes it a bit of a culture shock when you first come over, but I love the city and I just can’t wait to get back over there and get things underway.
“I’m really excited by the squad that the club is putting together and the players that are already here. They had a good season this year and hopefully we will go even better next year.
“Having Peter Gentle at the club was a big pulling card for me too. He used to coach me when I was younger and I’ve got a lot of time and respect for him, so I’m looking forward to working with him again.”
He worked with Hull coach Peter Gentle when the pair were at Wests Tigers.
Gentle said: “To have a player of Shannon’s ability come available at this late stage in the year was a real bonus for us. He was somebody we had identified earlier in the year when it became clear he would be leaving Hull KR at the end of the season, so we moved very quickly once we heard there was an opportunity to bring him to the club.
“I know Shannon and his family very well and he will be a really good fit for us in terms of the way we want to play next season.”