The DR Congo international is reunited with Blues boss Gary Rowett, who he played under for four years at Burton.
“I’m really happy to be reunited back with my old manager who I was under for two years before he came into management and he coached me altogether for about four years,” Maghoma told Birmingham’s official website.
“He was a big influence. At Burton he kind of raised my game to another level which helped me get my move into the Championship.
“After leaving Sheffield Wednesday it was almost perfect that I’ve been able to come back and work under him again at a big club like Birmingham and seeing how well they have done since he took over. I’ve got a really good feeling about next season.”