Black was released by Palace at the end of last season and had been heavily linked with the Shrimpers ever since.
"It wasn't a hard decision for me to be honest," he told Southend's official website.
"Southend is a club I have followed closely because it is sort of local to me. From there on, everything was pretty straight forward.
"Relegation was a sour note for Southend last season, but that's the way football is and it's important now that we bounce straight back and find ourselves at the right end of League One."