The 23-year-old, who joined the Premier League side on loan in September and marked his full debut with a stunning winner against Everton, has been out of action since suffering a bad leg-break in a match at Manchester City in October.
A gifted playmaker who cost Marseille 11 million euros when he signed from Olympique Lyon in 2008, Ben Arfa has signed a contract on Tyneside until June 2015.
"He's obviously a top player and he's shown that in France, at international level and in his short time here at Newcastle," Newcastle manager Alan Pardew said in a club statement.
"Once he's back fit, I have no doubt he'll confirm just what a superb player he is."
Despite winning five Ligue 1 titles, Ben Arfa has only been on the fringes of the French national side and has won just eight caps. He was left out of the squads for the 2008 European Championship and last year's World Cup in South Africa.
"I am getting back to fitness as quickly as I can and am really looking forward to getting back to St. James's Park, seeing the lads again and of course working with Alan Pardew and his staff," Ben Arfa said in a statement.
Newcastle, 10th in the league after 20 games, did not give details of the transfer fee.
The club added that Ben Arfa's recovery is "going well".
