The super rugby scrum-half will make the move to the Men of Gwent at the end of the 2014/15 season.
The 30-year-old made his Super Rugby debut for the Free State Cheetahs in 2009 against Western Force whilst also playing provincial rugby for the Griquas. In 2009 he also played for the Royal XV against the touring British and Irish Lions.
In 2012 Pretorius signed for the Waratahs for two years, but after just one season there he returned in 2013 to the Cheetahs to play Super Rugby.
Speaking after putting pen to paper, Pretorius commented: "I am delighted to have signed for the Dragons.
"They have a great group of players along with fantastic facilities and coaches, so I am looking forward to joining up with the squad. I feel that it is an exciting time to be involved and I am looking forward to seeing where we can go as a club."
Lyn Jones, director of rugby added: "We are delighted that Sarel has made the move to the Dragons.
"He is a very experienced player and it's that wealth of experience and ability that we need amongst our young squad.
"He is an exciting signing for us and is a great fit and I look forward to working with him next season."
Guinness PRO12
Suite 208, Alexandra House,
The Sweepstakes
Ballsbridge, Dublin 4, Ireland