The left-sided player turned down a new contract at Rotherham as well as several offers from other English clubs - he was liked with a move to Doncaster Rovers - to sign a two-year deal at Easter Road.
The 26-year-old former Peterborough player made 32 appearances for Rotherham in the Sky Bet Championship last season and scored 15 goals in four years at the New York Stadium.
Newell told Hibs TV: “It’s a big decision for me to come up here and leave home but I’m really happy.
“I came up in May for a look and the first impressions were really good. I’d obviously heard about the city and how big the club is.
“The training ground and stadium were good, then I spoke to the manager and that was probably the most impressive thing, to be honest.
“It was just the way he highlighted how he wants us to play, how he sees his team and the club progressing, his ambitions and how I fit into that. It got me straight away. It was really exciting.”
Heckingbottom said: “We’re excited to get Joe over the line. He’s coming in having played a lot of games at a good level in the English Championship last season and is a threat either out wide or inside.
“Joe can carry the ball up the park and I think he’ll link up well with our other attacking players. Joe had several other options so I am delighted that he chose to join us.
“It is exciting that we can attract players who believe in what we hope to do.”