Vettori will join fellow Black Cap Brendon McCullum as Brisbane's two international recruits in the league, the Heat said today.
It will be the 32-year-old left-arm spinner's second stint in Australian domestic T20 cricket, after turning out for the Queensland Bulls in the 2009 Big Bash series.
The league begins in December and Vettori said he was looking to being more involved with the Heat than he was during his spell with the Bulls.
"The travel back and forth was the toughest part of things last time," he said.
"I'm keen to being a bit more settled with things this time and be around the group a bit more."
Brisbane coach Darren Lehmann said Vettori was an obvious leader and his experience and skill would be vital.
He said Vettori's signing meant the Heat would have two quality spinners, the other being Australian international Nathan Hauritz.
"He'll bring people to the games and have an influence in a lot of matches for us," he said.
"As is the case with Brendon McCullum, we'll work through Dan's availability with his management and New Zealand Cricket and Northern Districts, but whatever he does, he brings absolute class to the table and we are delighted he is on board."
In March, after the World Cup, Vettori stepped down from the New Zealand captaincy and also announced his retirement from international T20 cricket.
He went on to skipper the Royal Challengers Bangalore in the Indian Premier League.
He has taken 79 wickets in 70 career T20 games, at an average of 20.96 and with an economy rate of 6.15.
In his 28 T20 internationals, he took 35 wickets at 16.57 each, and had an economy rate of 5.36.
