Allen said: "Paul made twenty-four appearances at Championship level last season and I believe that he will add a more creative feel to our team.
"He can play on either wing, is two-footed, he has good quality in the final third and he will definitely be an asset to this club.
"Once again there was interest from several other clubs and I'm delighted and relieved that he has finally chosen Brentford."
Allen has also being linked with bringing Reading's Lloyd Owusu back to the club for a second spell with the Bees.