Brooks is entering his ninth season in the league, having previously played for Houston, Phoenix, Sacramento, Denver and Chicago.
He has averaged 10.7 points and 3.2 assists in his career and gives the Pacers another experienced ball handler behind Jeff Teague, who was acquired in a trade with the Hawks earlier this summer.
The 31-year-old averaged 7.1 points in 16.1 minutes per game for the Bulls last season.
Pacers president Larry Bird says Brooks will give new coach Nate McMillan another scorer off the bench who can create off the dribble and hit 3-pointers.
Brooks is a career 37 percent shooter from 3.