The Irishman will make his debut for Rangers in September when the club's 18-month transfer embargo comes to an end.
And the 30-year-old insists he has no problem dropping into the lower leagues in Scottish football.
Daly said: "I've a lot of time for Ally and his coaching staff and to go on to play for them is a big thing.
"When we met for the first time, I could see the passion the manager has for the club and he really wants to drive it forward.
"I didn't really want my agent to speak to any other clubs, I wanted to try to get this deal over the line and thankfully that has happened.
"Having spoken to Ally, there's no doubt where I want to play my football and I'm really excited about what lies ahead.
"I've taken a step back in terms of the level of football I'll be playing but in terms of club size, Rangers are massive.
"There's a huge fanbase and when the chance came up to come here it was a no-brainer for me. It was a challenge I wanted to take on."