The 22-year-old scored seven goals in 37 appearances last season as Rovers were relegated from the Premier League.
Hoilett was out of contract but Rangers will be required to pay compensation because he is under 23. If the two clubs cannot agree a sum for the Canadian, a tribunal will decide a fee.
"I'm really happy to be here and can't wait to pull on the Rangers shirt," Hoilett told the QPR official website.
Hoilett becomes Mark Hughes's seventh signing of the close season, following deals for Rob Green, Ryan Nelsen, Fabio Da Silva, Ji-Sung Park, Samba Diakite and Andy Johnson.
He had been linked with German side Borussia Monchengladbach, but has opted to remain in the Premier League.
Hughes said: "Junior is a player I know very well. He was just a young boy trying to make his way in the game when I had him at Blackburn.
"We knew then he was going to have a great future and he's shown he's a player of top quality and a player that can makes things happen, both on his own and as a team player."
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