The 38-year-old forward, who finished last season playing at Championship rivals Reading, had been training with the Watford squad for the last few months.
Ferdinand has now put-pen-to-paper on non-contarct terms at Vicarage Road.
"Les has been training with us since pre-season and has now been given a squad number and signed non-contract terms," manager Adrian Boothroyd told the clubs official website.
"It's an arrangement that suits both parties with Les living locally and ourselves in need of further cover for the forward positions as we move into the middle of the busy Championship schedule."