O'Connor has over 250 professional appearances behind him with Crewe , Lincoln and Scunthorpe and, most recently, Rotherham. He joins on a free transfer after leaving the Millers in the summer.
Vale manager Micky Adams told the club's website: "Michael is a real quality player and I have to say well done to Norman (Smurthwaite, Port Vale chairman) who has worked extremely hard to get this over the line. It looked dead in the water yesterday (Thursday) but he's resurrected it.
"I'm sure the fans will like what they see when Michael plays because he's an all-round midfield player. He can pass, he can score goals and he's really competitive as well."
The signing of O'Connor comes on the same day experienced duo Steven Jennings and Michael Brown put pen to paper with the club, as the Valiants look to build on last season's ninth-placed finish in League One.
"Today with the signings of Michael Brown and Steven Jennings, the club have created some good competition for the midfield area and I'm excited about the coming season."
Breaking news, transfer gossip, line ups and goal alerts from your football club - delivered direct to your mobile. Sign up for Sky Sports Alerts