Shiels, whose played for League of Ireland champions Dundalk last year, joins a club that plays in the tier below the MLS in North America.
FC Edmonton are captained by former Linfield defender Albert Watson.
"Dean's a goalscorer and a creative player who works at a level we would expect of someone at FC Edmonton," said Edmonton head coach Colin Miller.
"Dean did very well for my old club Rangers and has had a fantastic career."
The 32-year-old, son of Derry City manager Kenny Shiels, spent four years at Rangers where he played in two promotion-winning teams.
Previously he had spells with Hibernian, Doncaster Rovers and Kilmarnock.
The attacking midfielder from Maghera won the last of his 14 Northern Ireland caps in 2012.
FC Edmonton will begin their NASL season in early April.
Northern Ireland strike Dean Shiels has signed for Canadian North American Soccer League club FC Edmonton.