Haigh, 39, left Leeds in April 2014 after Massimo Cellino bought the club.
"Penzance is a great grounding of a club, with an awful lot of potential to grow in the community," Haigh told BBC Radio Cornwall.
Penzance are bottom of the South West Peninsula League Division One West, the 11th tier of English football.
"The club contacted me through Twitter asking if I could help out," Haigh said. "I'd had one or two offers since Leeds, and I said no to them.
"But, the reason why I said yes to Penzance is because of the potential. They're at the bottom, so they can only go up.
"What I liked when I chatted to the committee was the passion. They're without debt, they can build on that and that's why I was really interested."
After leaving Leeds, Haigh moved to Dubai where he was acquitted in March over charges of sending an offensive tweet about a business partner.
But, he served a two-year sentence on separate charges of financial misappropriation.
Haigh, who grew up in Cornwall and has relocated to the county since leaving Dubai, will be sponsoring Penzance rather than financially backing them.
"There's no reason why clubs in Cornwall can't play at a higher level," he added. "But, it's going to take some investment in terms of infrastructure."
David Haigh, the former managing director of Leeds United, has been appointed as a committee member at Cornish non-league side Penzance AFC.