Pepe Reina, who turns 38 on Monday, won 36 caps and was a member of Spain’s 2010 World Cup-winning squad.
Reina still wants to play Champions League football but is likely to be Lazio’s second choice behind Albania international Thomas Strakosha.
“Reina is one of the strongest goalkeepers in history with incredible experience and is a positive person,” said Strakosha. “He’ll help me improve.”
Lazio finished fourth in Serie A last season to qualify for the Champions League for the first time in 13 years.
Pepe Reina moved to San Siro from Napoli in July 2018 but made only 13 appearances for Milan before joining Villa on loan in January.
He played 398 games for Liverpool after arriving from Villarreal in 2005 but left for Bayern in 2014 before spending three seasons at Napoli.