O'Neal will stand for election at the Papa John's annual shareholder meeting this year.
Papa Johns also will pay O'Neal $8.25 million over three years for the endorsement deal, it said in a regulatory filing.
O'Neal's directorship on the Papa John's board is his first on a publicly traded company.
Papa John's stock rose approximately 5 percent after the announcement, per CNN Business.
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Papa John's competitor Pizza Hut, owned by Yum Brands Inc, replaced it as sponsor for the National Football League past year.
"We are thrilled to partner with Shaquille and welcome him to the Papa John's board", Papa John's recently said in the press release.
Shaquille O'Neal will appear in Papa John's commercials as the company attempts to fix its image following the dismissal of founder John Schnatter.
He added: "Everyone knows Shaquille O'Neal, they know I'm in the fun business, and we want to get this thing back on track". He's also entered a marketing agreement with the company. For instance, he owns a Krispy Kreme Doughnuts franchise in Atlanta, a "Big Chicken" spot in Las Vegas, and "Shaquille's" restaurant in Los Angeles.
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National Basketball Association legend Shaquille O'Neal attends the grand opening of Shaquille's At L.A. Live at LA Live on March 09, 2019 in Los Angeles, California.
O'Neal said in an interview on CNBC Friday that Schnatter's use of the slur hurt the brand with African-American customers. I look forward to working with my colleagues on the Board and using my experience in business and community to build on the progress being made at Papa John's.
Schnatter later accused the company's board of directors of botching its investigation of the incident - and expressed regrets about resigning.
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Papa John's is trying to revive its image after the company's founder and namesake, John Schnatter, was reported to have used a racial slur during a media training session.