The 29-year-old joins Keith Curle's side, along with ex-Iron trialist Craig Dove.
Curle said: "Both players will add a mixture of experience and a vast knowledge of this level of football to our squad, and they will give us extra options.
"Craig can play on the left or right, whilst Justin is a cultured central midfielder."
Former England youth international Walker, joined Scunthorpe from Nottingham Forest in 1997.
The player made in excess of 100 appearances during his three-year spell at the club, which included a promotion.
Since he left the Iron in 2000 he has played for Lincoln City, Exeter City, York City and Cambridge United, where he spent the last two seasons.
The player has a wealth of experience having notched more than 300 Football League appearances in his career.