The 34-year-old former Wakefield captain left the Wildcats at the end of last season after seven years at Belle Vue.
Demetriou is thought to have opted for the newly-promoted Knights ahead of Hunslet, Widnes and Dewsbury after being given a chance to combine playing with a coaching role.
Knights general manager Ian Wilson told the York Evening Press: "If you look at the statistics from last season in Super League, he was very high in many of the tables.
"He's still got it. He's still in good shape, he's still enthusiastic and he's a good pro. He feels he can play for another couple of years at this level."
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