The former Liverpool, Portsmouth, Manchester City and West Ham goalkeeper was a free agent after leaving championship side Bristol City at the end of last season.
It was thought the 42-year-old would move to Exeter City, after being seen training with them over the last few weeks, but he has elected to join the Cherries instead.
Bournemouth manager Paul Groves believes the addition of James will bring valuable experience to the team this season.
"David brings professionalism, experience, competition and he is a fantastic person to have around the club," he told BBC Radio Solent.
"We want competition for places here. David has been training down in Exeter so he is in good condition as you would expect. He's had a bit of a break which has helped him and he looks the part.
"I've worked with him before and knew what he could bring to the party and that was a big ingredient of bringing him in."
James won his last international cap in the 4-1 defeat against Germany at the World Cup in South Africa in 2010.