To follow these steps you will need a program called Submerge which can be downloaded from here. There may be other programs which offer similar functionality but we have found Submerge to work quite well.
Install then launch Submerge from your Applications folder.
Select Open from the File menu.
Select the video file you would like to add subtitles to then click the Open button.
Click the Choose button in the toolbar.
Select the .srt subtitle file for your video then click the Open button.
Submerge will render the subtitles onto your video.
You can now skip through the video or movie and make sure the subtitles are correct.
Use the Settings button on the toolbar to open the Settings drawer.
From here you can customize how your subtitles look. You can set the font, attributes, relative size, alignment, text/plate, and time offset.
Once done customizing the look of your subtitles click the Render button on the toolbar to commit the changes.
In order to view subtitles in iTunes we must hard code the subtitles into the movie or video. Select Save As from the File menu.
Enter a name for the new subtitled file then click the Save button.
Submerge will now create a new file with the subtitles hard coded into it. This does not require recoding of the video so it is very fast. It shouldn't take more then a minute or so for a full length movie.
You can then drag the movie or video into iTunes to import it as you normally would.