The Patriots elected to sign Ferguson to their practice squad on Wednesday.
Watson, 29, is a former second-round pick of the Raiders back in 2013. He played the final year of his four-year, $4.15 million rookie contract before signing a three-year deal worth $18.3 million with the Broncos in 2016.
Watson was set to make a base salary of $5.5 million for the 2018 season when the Broncos released him from their injured reserve.
Since becoming a free agent, Watson has worked out for the Jets and Bears but left both meetings without a contract.
In 2017, Watson appeared in seven games for the Broncos and was rated by Pro Football Focus as the No. 76 offensive tackle out of 79 qualifying players.