The Kuwait international goalkeeper arrives from Al Arabi in his homeland with 30+ caps for his country to his name.
Fawaz Al Hasawi, Forest's chairman, said: "I would like to thank the FA tribunal for reaching a positive outcome for the club and for Khalid.
"He is excited about the prospect of becoming the first Kuwaiti to play in English football and helping to spread the name of Forest in Kuwait."
Manager Alex McLeish has confirmed that he is not looking for another goalkeeper and that Al-Rashidi will understudy Karl Darlow in the first team.
The club meanwhile have announced the departures of chief executive Mark Arthur, chief scout Keith Burt and former boss Frank Clark from his role as ambassador.