The 35-year-old becomes the Lions’ seventh new arrival ahead of the 2026/27 campaign.
Batth brings more than 500 appearances in English football to The Den, having represented Wolverhampton Wanderers, Stoke City and Sheffield Wednesday.
A boyhood Wolves fan, Batth joined the club aged 10 and progressed through the ranks to captain the side, helping them win both the League One and Championship titles.
“We’re pleased to bring Danny in,” said Steve Gallen, Millwall's Director of Football.
“He’s a hugely experienced centre-back who’s earned respect throughout the game over a long career, and that experience is exactly what we’re looking to add to this group.
“Danny’s leadership and attitude will count for a lot, both on the pitch and in the dressing room.
“He adds strong competition in that area of the pitch, and it’s also allowed Kamarl (Grant) to go out on loan, which is a good move for him - he’ll get valuable league experience and continue his development.”