Having played second fiddle to Gregory van der Wiel last season, the 30-year-old was set to slip further down the pecking order in light of the imminent arrival of Serge Aurier at Parc des Princes from Touluse.
Consequently, Jallet jumped at the opportunity to continue his career at the Stade de Gerland.
"From the moment Lyon told me of their told me of their interest, it was a priority for me," the defender told his new club's official website.
"I am very pleased to be here today. This is a new challenge for me, I have experienced a lot of things in my career.
"I want to take some new steps. I spent wonderful years in Paris but I need to go elsewhere to find some game time and fun.
"I am very happy to join this quality group to try and make my contribution to the defence and make a very nice season."
Jallet, who has five France caps to his name, joined PSG from Lorient in 2009 and won two Ligue 1 titles during his time with the capital club.