Fraser left Bournemouth when his contract expired in June.
The Scottish winger and Wilson were the most productive duo in the 2018-19 Premier League campaign, with Fraser assisting for Wilson on seven occasions and the striker setting up Fraser five times.
"He has wonderful chemistry on the pitch with Callum Wilson, which excites me, and I hope it excites our supporters ahead of the new season," Newcastle manager Steve Bruce said after signing Fraser.
Bournemouth will play the 2020-21 season in the Championship. Fraser admitted that his form dipped during the Cherries' relegation term due to the rampant speculation about his future, while Wilson could muster only eight goals.
Midfielder Jonjo Shelvey led Newcastle in league scoring last season with six goals.