The 36-year-old, who has signed a one-year contract, was a free agent after leaving the Greek side PAOK Salonika in June 2016.
Berbatov, who is Bulgaria's all-time leading scorer with 48 goals in 79 matches, joined United from Spurs in 2008 for a then club-record fee of 30 million pounds ($39 million).
In Manchester, the Bulgarian scored 48 goals in 108 Premier League appearances, winning two league titles.
Berbatov will link up with Kerala's new head coach Rene Meulensteen, who worked with the him during his time at Old Trafford as well as Fulham. Last week, the Indian club also signed former Manchester United defender Wes Brown.
Berbatov, named Bulgaria's Footballer of the Year on seven occasions, has also played for CSKA Sofia, Bayer Leverkusen and Monaco during his illustrious career.