French midfielder Steed joined us from Fulham in August, 2006.
Steed played over 200 games in all competitions for the Cottagers after joining from Lyon at the start of the 2001-02 season. He scored 32 goals in 160 starts in the Premiership.
Martin Jol commented: "Steed is a skilful, versatile midfielder of real quality.
"He is a player we have always admired and we are delighted he has come to us, there were a number of other clubs interested. He is a player who can cover the left, centre and right midfield positions and will work well within our system."