The 33-year-old will arrive in Victoria on a free transfer after ending a four-year stay at PSV Eindhoven earlier this year.
He began his career in Feyenoord's youth team and has previously played for NAC Breda, Genk, FC Twente and Schalke.
John Aloisi has been vocal about his desire to bring in a quality holding midfielder and the Heart coach backed his new signing to make a significant impact on the A-League.
"I am confident that Orlando will be one of the most accomplished midfielders that has come to play football in Australia," Aloisi said.
"The club has worked hard for a number of seasons to attract a player who can dominate and control matches from midfield and we believe that we have found that player."
Engelaar made 14 appearances for Holland and played in every game at Euro 2008, a tournament the Dutch excelled at under Marco van Basten before bowing out in the quarter-finals to Guus Hiddink's Russia.
"You don't pull the strings in the midfield for the Dutch national team unless you have some special qualities," Aloisi said.
"We can't wait for the season to get started and, with this signing, believe that we have given football fans something to get really excited about."
Due to arrive in Melbourne to commence pre-season training late next week, Engelaar joins Harry Kewell, Massimo Murdocca, Rob Wielaert and Tando Velaphi as Heart's off-season recruits, with Aziz Behich re-joining the club on loan.