Kelly makes a high-profile move across the city of Hull from arch-rivals Hull Kingston Rovers, following their relegation to the Kingstone Press Championship.
Kelly said he can’t wait line up alongside his new teammates.
“It’s very exciting and they’ve got some star players in there: Danny Houghton, Man of Steel, played tremendous all year round,” he said.
“There’s Sneydy, Jamie Shaul, there’s plenty of players across the field that I will look forward to playing alongside,” he said.
“I think I might bring a bit more sting in attack and I think that’s a bit of excitement for the fans as well.
“It was pretty exciting seeing Hull go to Wembley and win the Challenge Cup. Some of my good mates were in there and to see them smiling and lifting the trophy is something I want to do as well.
“I think because the boys won it last year, we can go back-to-back if we put in performances each week. “
Michaels joined Hull FC in 2015.
He said: “I’m really happy to be on board for next season. I love the players, the fans and the club. I’m really happy to commit my future to Hull FC.
“Last season was really special to me – it was the first time that I had won something and memories like that will stay with me forever and they’ve been great to look back on during the off-season.
“Hopefully we can kick on now in 2017 and try to pick up some more silverware.”