The Lord of the Rings star will appear in the comedy-drama's sixth season as the eccentric curator of the Santa Barbara Art Museum, according to Variety.
Psych creator Steve Franks will write and direct the episode, which will also star Saw actor Cary Elwes in an unspecified part.
In addition to his Lord of the Rings role, Rhys-Davies previously appeared in such films as 1981's Raiders of the Lost Ark and 1987 Bond film The Living Daylights.
His past television credits include two episodes of Star Trek: Voyager and a starring role on Fox sci-fi drama Sliders from 1995 to 1997.
It was recently announced that Heroes star Greg Grunberg and Weeds actress Lindsay Sloane will also appear in an upcoming episode of Psych.
The show's sixth season premieres in October on USA.
> Jennifer Finnigan to appear on Psych
> Jason Priestley signs for Psych role
Watch a clip from the Psych fifth season finale below: