The Mexico international will wear the No. 18 at the Eredivisie club and says he hopes to win silverware during his time there.
The 27-year-old winger spent the latter part of last season in the Bundesliga with Bayer Leverkusen, but returned to the Mestalla this summer and played a big part in Valencia's preseason matches.
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However, the Mexico international has now opted for another temporary spell away from the Liga side, joining the Eredivise giant until the end of the 2014-15 campaign.
"I'm very pleased and looking forward to a great season, which I will play in to win prizes," Guardado, who will wear the No.18 shirt, told PSV's official website. "This is a great club and I hope to be able to be successful here."
The 27-year-old becomes the third Mexican to have featured at PSV, following successful stints by Carlos Salcido and Francisco “Maza” Rodriguez.
PSV is currently in first place in the Eredivisie, with three wins in three games so far this season, including a 3-1 victory over archrival Ajax last weekend.
The Dutch outfit is Guardado’s fifth club. The Guadalajara native began at Liga MX club Atlas, before heading to Deportivo La Coruna in Spain, then on to Valencia, from where he was loaned out last season to Germany’s Bayer Leverkusen.
Guardado has 108 caps for the Mexican national team and enjoyed a successful World Cup playing as a central midfielder in Brazil.