George Friend will be another familiar face for Clayton, the left-back having also swapped The Riverside for Birmingham this summer.
Manchester-born Clayton played for Leeds and Huddersfield before joining Boro in 2014. He made 241 appearances for the Teessiders, including 34 during the ill-fated 2016-17 Premier League campaign.
Birmingham revealed that Clayton has the option of a further year on his deal with Blues.
Karanka faces Birmingham rebuild
Birmingham survived in the Championship by two points after failing to win any of their final 14 games.
Karanka faces a rebuild after Jude Bellingham was sold to Borussia Dortmund. Loanees Scott Hogan and Jake Clarke-Salter have also returned to Aston Villa and Chelsea respectively.