Kennedy, 33, returns to StubHub Center, where he starred for Chivas USA from 2008 to 2014.
“Dan is a very good player and proven goalkeeper in our league,” Galaxy head coach Bruce Arena said in a news release. “He will be a strong addition to our team both on and off the field. We look forward to him joining our roster ahead of the upcoming season."
The veteran goalkeeper had become surplus to requirements in Dallas, where 20-year-old Jesse Gonzalez won the starting job from Kennedy during the 2015 regular season. Meanwhile, the Galaxy have an opening between the sticks after Jaime Penedo left the team midseason and the club declined the option on his replacement Donovan Ricketts last week.