Southern has penned a two-year contract with the Terriers, where he is reunited with manager Simon Grayson. The 31-year-old worked under Grayson when Blackpool were promoted out of League One during the 2006/07 season.
"We have been very patient waiting to get the right man with specific attributes for a key role," Grayson told the club's official website. "I know exactly what Keith is all about; I played with him and managed him at Blackpool and he's got great ability."
He added: "He's a wholehearted player, a real leader and he's operated at all levels; League One, the Championship and the Premier League, where he was at the heart of the team.
"I'm delighted to have got him - he adds to the competition for places that we already have. We've got some good options now but Keith's arrival gives us a different type of midfield player."
His transfer ends his 10-year association with the Tangerines, who he joined from Everton in 2002.