Belgium-born Moussa, 26, joins the League One Saddlers after his short-term deal with the Shrimpers finished at the end of last season.
"I'm really pleased to have signed and I feel this is a club where I will fit in nicely," Moussa told the club's official website.
He becomes Walsall boss Jon Whitney's eighth signing of the summer.
Moussa started his career at Southend, scoring eight goals in 103 games, before moving to Leicester City in August 2010.
He had a more prolific spell in two seasons with the Sky Blues from September 2012, where he scored 20 times in 92 appearances.
Moussa rejoined Southend in March on non-contract terms after spending most of last season at Charlton.
"I feel this is a big season for me," Moussa added. "A lot of trust and confidence has been put in me to perform and I really want to do that and hopefully we can have success as a team."
Moussa's deal has an option for a further year and he joins Joe Edwards, Kacy Milan Butterfield, Erhun Oztumer, Florent Cuvelier and Theo Vassell in signing permanent contracts at the Banks's Stadium.
Southampton defender Jason McCarthy and West Ham midfielder George Dobson have also arrived on loan.
Find all the latest football transfers on our dedicated page.
Walsall have signed former Southend United and Coventry City midfielder Franck Moussa on a one-year contract.