The Spanish defender made 94 Premier League appearances for Villa following a £7.8 million transfer from Rangers in 2008.
However, he made only 17 league starts last season and 10 in the 2010-11 campaign.
Cuellar offers versatility as he can operate either as a centre-back or a right-back.
Cuellar told SAFC TV: "Ever since I heard the rumour that Sunderland were interested in signing me, I wanted to come here.
"To work again with the gaffer, Martin O'Neill, and with everyone talking so well about the club, I didn't have any problem and said straight away I wanted to come.
"He is so clever, he knows everyone very well and knows how to push everyone to get 100 per cent out of them. He gets the best from every player and brings them together to make his teams very competitive."