Falkirk say they secured the signature of Paul Watson following the defender's exit from Raith Rovers despite competition from several other clubs.
The 24-year-old was on the books of Ipswich Town as a youth, but it was with Livingston that he broke into the first team.
He won successive league titles with the West Lothian club before moving to Kirkcaldy in 2013.
Watson played 43 times for Falkirk's Championship rivals last season.
Falkirk's website stated: "Having been subject to a number of contract offers, Paul has decided that his future lies at the Falkirk Stadium."