Boss Andy Scott told the club website: "It is no secret that Toumani has been a long-term target of mine.
"I feel at his age and level of experience he will be a very important player for us now and in the future."
Diagouraga began his career as a trainee with Watford who loaned him to Swindon, Rotherham and Hereford during his time at Vicarage Road.
He joined the Bulls on a free transfer in July 2008 before moving to Peterborough 12 months later.
Source: BBC Sport
Source: BBC Sport