Prosecutors said England had a sick sense of humour
Private Lynndie England, who faced up to nine years in prison, has also been given a dishonourable discharge.
England, 22, appeared in some of the graphic photos of abuse at the prison.
The panel found her guilty on four counts of maltreating detainees, one count of conspiracy and one count of committing an indecent act.
She was acquitted on a second conspiracy count.
Sentencing came a day after her conviction on Monday.
In reaching their guilty verdict, the panel rejected the defence argument that she had been led astray by her colleagues, in particular her then boyfriend, Specialist Charles Graner.
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He too has been convicted of prisoner abuse, and is serving 10 years in jail, but most of the other seven army reservists charged were jailed for six months to a year after making plea bargains.
It took the panel of five military officers just two hours to reach their verdict on England.
A military prosecutor had argued that England had humiliated prisoners because she enjoyed it and had a sick sense of humour.
Prosecutor Chuck Neill said England had been an active participant who enjoyed enacting the scenes captured on camera.
"This was simply for the amusement of Private England and the other soldiers," he said.
In photographs published around the world in April 2004, England was shown holding a naked Iraqi prisoner by a leash, and pointing to a naked inmate's genitals.
England's original guilty plea was rejected at a military tribunal earlier this year.
The military judge then was not convinced that she knew that what she had been doing was wrong.