Cthulhu (or referred by many names such as Kutulu) is a cosmic entity and is one of the central Great Old Ones. His appearance is that of a gigantic, bat-winged, octopus-headed humanoid of extraterrestrial origin.
Cthulhu was one of the prominent Great Old Ones who first visited Earth and battled the Elder Gods. After this great war Cthulhu, and like some of his ilks, was imprisoned in the sunken city of R'lyeh. However, there were cults dedicated to Cthulhu since the Hyperborean Age before suddenly disappearing during the advent of the Ice Age.
In 1926, Cthulhu's prison of R'lyeh was discovered by the Johanssen expedition and the Great Old One himself awakened, but was at least temporarily incapacitated again by being rammed by the expedition's ship. A few years later, in 1930, an emissary of Yuggoth in London invoked Cthulhu (misheard as "Cool Lulu" by the hapless Bertie Wooster) in a ritual at the estate of Dahlia Travers, but the dread rite was interrupted by Mina Murray and company.
Cthulhu was created by American horror author H. P. Lovecraft in 1926. The first and only physical appearance of the character was in the short story The Call of Cthulhu published in Weird Tales in 1928. While the works of Lovecraft are in the public domain in the United Kingdom, the copyright status of the character is continually debated in the United States due to numerous parties giving unverified claims of the character's copyright, and it's possible that his name is deliberately misspelled as "Kutulu" in The League of Extraordinary Gentlemen because of that reason, though this conflicts with the character being named explicitly as "Great Cthulhu" in The Game of Extraordinary Gentlemen, a two-page roll-the-dice game in Volume II.