The Icelandic Under-21 captain has signed a two-year contract and becomes Allen's fourth addition - joining Joe Tillen, DJ Campbell and Ricky Newman at Griffin Park.
Skulason said: "I look at this as a very important move for my career, a step up from reserve football, and knowing that Martin had been interested in signing me for a while was a huge compliment for me.
"You always need to improve, and for me, I need to prove that I'm a league player, and prove Martin right, in that I'm the right player for this club."
Boss Allen added: "He has character, a dour personality and without a shadow of a doubt this is a step up for him, joining Brentford Football Club to play in the first team."