The 21-year-old left-back has been out of contract since the end of last season, but put pen to paper on a contract on Friday afternoon.
"I feel he's a player that will develop with us. I really do," Powell told the club's official website.
"He's got all the qualities I want in a left-back and he will push Rhoys [Wiggins]. I'm hopeful we'll come to an agreement.
"It's gone on too long, it should have been resolved. I've integrated him back into the group because that's the best place for him."