The 27-year-old won the Player of the Year award at Shrewsbury Town last season and arrives at Adams Park with a wealth of Football League experience under his belt with Cardiff City, Bristol Rovers, Oldham Athletic and Accrington Stanley.
Jacobson has also captained the Welsh Under-21 side and subsequently received a series of call-ups to the senior squad.
Blues boss Ainsworth last week highlighted the need for a new left-back to enable Sam Wood to play further forward in midfield, and says he is delighted to bring Joe to the club:
"Joe is a great left-back first and foremost and I know he’ll do a really strong job for us defensively,” he said. “But he’s got a quality delivery on him and he can chip in with the odd goal as well.
“I first knew Joe at Cardiff a decade ago and could spot at that point that he was going to go on and make it as a player, and to win the Player of the Year at Shrewsbury last season shows how well he’s thought of in the game, so we’re lucky to have him.”