The 25-year-old joins after lifting the KNVB Cup with Groningen for the first time in their history.
The 25-year-old is the Blues' fifth signing of the summer, and arrives at St Andrew's after spending five years with Groningen in the Eredivisie, in which time he became the club captain.
His last game for the club was a 2-0 win over PEC Zwolle in May that saw Kieftenbeld lift the KNVB Cup last season, the equivalent of the FA Cup in Netherlands, Groningen's first ever top level trophy.
The Birmingham Mail said Gary Rowett completed the deal after triggering Kieftenbeld's release clause, with the player having one year remaining on his contract. He signed for Groningen in 2010, going on to make 147 league appearances at the Euroborg, where he also scored 2 goals, and he is a former Dutch Under-21 player, making 5 appearances between 2010 and 2011.
Having come through FC Twente's academy as a youngster, Kieftenbeld first sampled first team football at Go Ahead Eagles before moving onto Groningen, where he quickly established himself as a key member of the side.
Kieftenbeld now finds himself competing against the likes of Jonathan Spector, David Davis and Stephen Gleeson for a central midfield position in the Blues side.