The 30-year-old, who spent the second half of last season on loan at Bologna, will have the option to make his stay at Vicarage Road a permanent one at the end of the 2016/17 campaign.
A statement on Watford's official website read: "Juan Camilo Zuniga has completed a season-long loan move to Vicarage Road, Watford FC are pleased to confirm.
"The experienced Colombian international has signed a loan deal from Italian outfit Napoli, and the Hornets also hold the option to make the move permanent."
Hornets head coach Walter Mazzarri is fully aware of the talents Zuniga possesses, having worked with the versatile fullback at Napoli between 2009 and 2013.
Zuniga made nine appearances for Bologna last term, providing one assist as the Rossoblu secured a 14th-place finish in the 2015/16 Serie A season.
He has represented Colombia 61 times, scoring once.