O'Neal, 33, was the 17th overall pick in the 1996 NBA draft out of high school by Portland. He's played with five teams in his 15-year career.
The center appeared in 25 games for Boston last season, averaging 5 points and 5.4 rebounds a game.
"We are pleased that Jermaine will continue his successful NBA career in Phoenix," said Suns President of Basketball Operations Lon Babby. "We look forward to his contributions not only on the floor but as a veteran leader on our team."
O'Neal averaged 13.7 points and 7.4 rebounds over 911 NBA games. He was an All-Star selection each season from 2002-07.