Walters, 21, was released by the Premier League giants in the summer.
He had been with the St James’ Park club from the age of eight and goes straight in to contention to make his senior debut in the NPL against Pontefract Collieries.
Walters said: "I'm really happy to be here.
"I want to get my head down and help the club push on.
"I've had a few training sessions and it's been really enjoyable - I can't wait to get playing games.
"I knew a few of the lads beforehand anyway through Newcastle, so it's been quite easy to fit in."
Keep up-to-date with our exclusive email newsletters.
Digital advertising by Minute Media
© Pitch Hero Ltd 2008-2021
Pitch Hero Ltd Registered in ENGLAND | WF3 1DR | Company Number - 636 1033