Cotterill tried to sign Naylor earlier in the summer, but pulled the plug on the deal with Naylor taking an age considering the transfer.
It was thought he was involved in a transfer merry-go-round which would have seen Northampton's Jamie Forrester move to Wycombe and Naylor arrive at Sixfields as a replacement. However, after Forrester failed to agree terms with The Chairboys, Naylor was not needed by The Cobblers and was left without a club.
The 34-year-old spent the summer training with Macclesfield Town, the club nearest to his home, and The Silkmen did try and sign him, but could not agree personal terms with the player. However, Cotterill persevered with the deal and was delighted that his patience had finally paid off.
"The transfer came back on a couple of days ago," he revealed.
"I asked Mike Davis (assistant manager) to telephone Tony to see if his personal circumstances had changed and he said 'yes'.
"I'm very pleased to have signed him because I have been saying for some time that we needed another forward.
"Tony will give us quality competition, he is a goal maker as well as a goal scorer and will be a big asset to Cheltenham Town.
"He is an intelligent footballer, he sees things, brings other players into the game and scores goals. He will also be a different option to what we have already got."
The Robins will be Naylor's third Football League club following spells at Crewe and Port Vale.
Meanwhile, The Robins have failed in an attempt to sign Manchester City winger Chris Shuker on-loan.
Cotterill is a big fan of the 19-year-old, but City's new management team of Kevin Keegan and Arthur Cox are reluctant to loan players having just arrived at the club.
