Iglesias, 26, had spent the bulk of his career outside the top flight until joining Espanyol last season. He soon made a name for himself by striking 17 league goals, helping the club qualify for European football for the first time in 12 years.
The striker will be reunited with coach Rubi, who guided Espanyol back into Europe before switching to Betis, who finished 10th in the standings.
He also becomes Betis most expensive signing in more than two decades, his fee only eclipsed by the 31.5 million euros the club paid to sign Brazilian midfielder Denilson in 1998.
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Betis have now spent 67 million euros in the close season, splashing 19.5 million on French midfielder Nabil Fekir from Olympique Lyonnais and 8 million on Spanish forward Juanmi from Real Sociedad. ($1 = 0.8975 euros) (Reporting by Richard Martin Editing by Christian Radnedge)
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