The 36-year-old was a free agent after failing to turn up for pre-season training at Coventry, who promptly rescinded their offer of a contract extention.
Staunton has previously played Premiership football with Liverpool and Aston Villa.
Saddlers player-boss Paul Merson said: "Steve is a vastly experienced player who I have played alongside and against many times.
"His presence will really help the young players here, and his arrival can only enhance the squad."