Jon Macken joined PNE in July 1997 from Manchester United for £250,000 and scored 63 league goals in 184 appearances.
His performances earned him a £5m move to Manchester City in March 2002, whom he helped win the First Division title in 2002.
Macken spent three years at City before moving to Crystal Palace and then Barnsley in November 2007, initially on loan.
He played 105 league games for the Tykes, scoring 21 goals in the Championship, before being deemed surplus to requirements by manager Mark Robins.
The 32-year-old Republic of Ireland cap was training with the Saddlers after being released by Barnsley in June. He has signed on a one-year deal with the option for a further 12 months.
Walsall who were challenged by Rotherham and Bradford for his signature will be looking as some of the form he had with PNE when they won the Division Two title in 1999/2000. Macken scored 22 league goals in that season and was included in the PFA Second Division select side.