The manager also revealed that United beat off competition from other clubs for the centre-back's signature. The defender had been linked with Chester City and told boss Keith Curle that he would be keeping his options open.
League One rivals Barnsley had also been linked with Foster.
"Steve's misfortune with his manager is our good fortune," Laws told the Scunthorpe Telegraph.
"He is a good, experienced player. He is a leader on the field and we have had to fight off plenty of opposition to sign him.
"He has a bit of pace, is a good organiser and can also play a bit of football."
His signing boosts United who have lost Andy Butler for the rest of the season with ligament damage.