The 32-year-old has not played since injuring his neck while playing rugby league for Wigan Warriors in September.
However Warburton, who captained the 2013 British & Irish Lions tour to Australia, believes the No.8 will be a big success upon his return to Wales.
"It's an awesome move and a great signing by the Dragons," Warburton told the South Wales Argus. "To have Andy, Taulupe Faletau and Lewis Evans, that's a really tasty back row.
"With the other signings they have made this summer the Dragons will be even more competitive this year and I am sure they will have a good season.
"It's great that players are coming back to Wales and everybody who has met Andy loves him.
"He will be a great addition for the Dragons and you know that he will bring aggression and physicality.
"Andy is also a really good trainer and that will rub off on the rest of the guys. He spends a lot of time in the gym and on the training pitch doing extras, so is a great player to have in the squad."