Jones, 29, had been attracting interest from several clubs, but has opted for a move to Championship new boys Scunthorpe.
He was wanted by Nottingham Forest and Colchester United during the January transfer window and has recently been linked with the likes of Bristol City and Derby County.
However, the former Grimsby stopper is confident that he has made the right choice in accepting a move to Nigel Adkins' Iron team.
"I wouldn't have moved to the club if I didn't think it could stay in the Championship," Jones told the club's official website.
"It feels great to sign for Scunthorpe United. It's nice to be back in England and in an area which I'm familiar with after my time at Grimsby.
"I wouldn't necessarily say where the club is was a factor behind the move, it's where the club's going. I came down on Wednesday and the move just felt right for me.
"The right noises came from the football club. I was interested in coming here and I've now cemented that.
"I'm confident that I, and the club, have what it takes to compete at Championship level. I'm just looking forward to it."
Scunthorpe have not disclosed the exact size of the fee, but it eclipses the £335,000 paid to Stoke City for Martin Paterson two years ago.