Cabrera, who completed a 50-game suspension for a positive test for testosterone, was not wanted back by the World Series champion San Francisco Giants.
He's still a good hitter, on the stuff or not," Gibbons said.
Cabrera gets $8 million in each of the next two seasons, up from a $6 million base salary this year.
The 28-year-old was leading the National League in hitting at .346 when he was suspended Aug. 15. He asked for a rules change that disqualified him from the batting title, feeling it would be a tainted crown. Cabrera had 11 homers, 25 doubles and 60 RBIs in 113 games.
Gibbons, announced as Toronto's new manager on Tuesday, was bench coach in Kansas City when Cabrera played for the Royals in 2011. He remembers Cabrera when he played for the New York Yankees and Gibbons managed Toronto in his previous stint.
"He was a very tough out back then. He had a knack for the big hit," Gibbons said.
Toronto general manager Alex Anthopoulos said a lot of players have received second chances in baseball. He said there won't be a third or fourth.
"Obviously, he made a terrible mistake," Anthopoulos said. "We heard he's a great teammate."
Gibbons envisions Cabrera batting second in his lineup.
"Alex paid a lot of money for him to come over and hit so he'll get as many at-bats as he can," Gibbons said.
Cabrera made his major league debut in 2005 with the New York Yankees and stayed with them until being traded to Atlanta after the 2009 season.
Toronto scored 716 runs last season, seventh among the 14 American League teams.