Mason has been without a club since Hull KR were forced to release him to join French rugby union side Toulon in May last year.
However his stay and France was cut short amid rumours Mason was not happy and he left in December.
“I am grateful that Wayne and the club have shown confidence in me to contribute to the club and I will not be wasting the opportunity to not only perform on the field but to contribute to the Knights strong community programs,” Mason said.
“I am aware that I still have plenty of hard work ahead of me to earn a spot in the NRL team.
“It is great to be home and playing in front of my family, friends and the Newcastle community. I can’t wait to run out for my first game in the famous Knights colours.”
Mason, 32, has endured his fair share of controversy over the years but Chief Executive Matt Gidley that he can perform for the Knights.
“We are pleased to be able to offer Willie an opportunity to re-establish his rugby league career back in his home town,” Gidley said.
“Willie’s experience and physical traits will bring confidence to our current squad, particularly our emerging players for which we have very high hopes.
“This is another example of bringing local talent back to Newcastle and a philosophy we will continue to promote throughout our rugby league community.”