Foley is in South Africa with the Wallabies as they prepare for their first Rugby Championship match next weekend against South Africa in Johannesburg.
"The Waratahs gave me my first opportunity at professional rugby and I've grown so much as a player and person during my time here, playing with some of the game's greats and making friendships that will last a lifetime," Foley said.
Meanwhile, Japanese club Kintetsu Liners, a second division side, confirmed they had signed Will Genia and Quade Cooper, who both played Super Rugby with the Rebels this season.
The trio of Foley, Genia, who is also in South Africa with the Wallabies, and Cooper have played 238 tests.
Foley is eligible to return to the Wallabies because he has reached the 60-test threshold required for overseas-based Australian players.
Cooper has played 70 tests but was not named in Wallabies coach Michael Cheika's Rugby Championship squad.
Genia, who has played 100 tests, announced he will retire from international rugby following the World Cup in Japan.
The 31-year-old halfback became just the 10th Australian player to reach 100 tests when he ran out against England at Twickenham last year.
"When I had to make the decision, I felt the time was right for me," Genia said. "There is a whole bunch of young Australian halfbacks who are very good."
Genia was the 78th Wallaby to captain Australia, after skippering the side against the United States at the 2011 World Cup.
- AP