The 31-year-old joins Chennaiyin after the expiry of his contract at Italian third tier outfit Foggia Calcio.
Potenza is a product of the Inter Milan youth system and has represented Italy at Under-19, Under-20 and Under-21 levels, winning the 2003 UEFA Under-19 Championship and 2004 UEFA Under-21 Championship.
At Inter Milan, Potenza had loan stints at Ancona, Parma, Chievo and Spanish La Liga's Real Mallorca. He then made a permanent switch to Fiorentina in 2006 and spent two seasons there before joining Genoa. However after just half a season there, Potenza moved to Catania and spent four and a half campaigns there.
Chennaiyin FC manager Marco Materazzi said, "We are delighted to have signed Potenza. He is a player I know very well of course and since we were looking for one more defender he was the perfect candidate to fill that slot.
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"Potenza has immense experience so he will have a big influence in our team both on and off the pitch. I have full faith in him to make a big contribution in our quest for the title in this year's ISL."
"It will be a big change in environment for me but I am really looking forward to the experience of playing in front of big crowds in India especially Chennai. For now I want to focus on a building a great understanding with my new teammates at the pre-season camp and hopefully we will achieve the goal of making Chennaiyin FC the champions."