The Scottish actress will play Lydia, an "important" character in the drama's fifth season, Entertainment Weekly reports.
"[She's a] former associate of Gus Fring (Giancarlo Esposito) who's integral to the proceedings of season five," show creator Vince Gilligan revealed. "[She's] nervous about her place in the world."
Fraser's past credits include film roles in 2001's A Knight's Tale and the same year's Vanilla Sky, plus television appearances on UK dramas Single Father and Lip Service.
The 35-year-old was also cast as Jessica Brody on Showtime's Homeland, but was replaced by Morena Baccarin after filming the show's pilot.
The fifth season of Breaking Bad will be broken into two parts, airing a total of 16 new episodes. The first eight instalments will air on AMC from Sunday, July 15 at 10pm ET, with the remaining eight episodes following in summer 2013.
> Breaking Bad Vince Gilligan Q&A: 'I want UK fans to see the show'
Watch the new trailer for Breaking Bad season five below: