Haigh, 39, left Leeds in April 2014 after Massimo Cellino bought the club.
"Penzance is a great grounding of a club, with an awful lot of potential to grow in the community," Haigh told BBC Radio Cornwall.
Penzance are bottom of the South West Peninsula League Division One West, the 11th tier of English football.
"The club contacted me through Twitter asking if I could help out," Haigh said. "I'd had one or two offers since Leeds, and I said no to them.
"But, the reason why I said yes to Penzance is because of the potential. They're at the bottom, so they can only go up.
"What I liked when I chatted to the committee was the passion. They're without debt, they can build on that and that's why I was really interested."
After leaving Leeds, Haigh moved to Dubai where he was acquitted in March over charges of sending an offensive tweet about a business partner.
But, he served a two-year sentence on separate charges of financial misappropriation.
Haigh, who grew up in Cornwall and has relocated to the county since leaving Dubai, will be sponsoring Penzance rather than financially backing them.
"There's no reason why clubs in Cornwall can't play at a higher level," he added. "But, it's going to take some investment in terms of infrastructure."

The competition between sides in Jersey and Guernsey was scrapped in 2012 because of inter-island travel costs and too many one-sided encounters.
The Jersey Cricket Board (JCB) has confirmed it will return from June until August.
"We hope it's going to invigorate the game," said JCB chief executive Chris Minty.
"The clubs have now realised that their local domestic cricket is perhaps getting a bit samey and they're looking for other challenges and this presents that challenge.
"We've managed with some help from people in Guernsey to overcome, in part, the travel issues of going backwards and forwards."
Guernsey only has three sides - Griffins, Cobo and Wanderers - playing one-day cricket, while Jersey has four. However, a number of games have been called off in recent seasons because of a lack of players.
"It's no secret that in both islands' clubs have been struggling to put sides out for what we call longer games of cricket at the weekend," Minty told BBC Radio Jersey.
"We're hoping this is going to give people a new focus and some slightly different cricket against some slightly different opposition."
David Haigh, the former managing director of Leeds United, has been appointed as a committee member at Cornish non-league side Penzance AFC.
[NEXT_CONCEPT]
The Channel Islands Cricket League will be reinstated this summer to give players more variety of opposition.