The 26-year-old left Kenilworth Road in the summer after an injury-hit spell with Town, where he made 32 appearances, netting four times.
He played under Harriers Whild at Redditch United earlier in his career and the number two said: “James has a fantastic attitude and I can’t speak highly enough of him in that regard.
“He’ll be the first to admit he didn’t play as much as he would have liked last season.
“But I am sure that if he gets his head down and works hard to get back to his best then he’ll be a real favourite with the Kidderminster fans and an asset to the team.”
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On hearing the news, Dance himself tweeted: “Delighted to have finally signed at Kidderminster. Been a long time coming.”
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