The 23-year-old Letterkenny midfielder has previously played with Finn Harps and UCD in the League of Ireland.
Meanwhile City midfielder Barry McNamee is currently on trial with Nottingham Forest.
Recently, left-winger Stephen McLaughlin had a one week training stint at the City Ground, amid reports Forest are keen to establish a closer relationship with the Candystripes.
The capture of Houston is manager Declan Devine’s second signing since City won the FAI Cup last month.