The 26-year-old, who began his career as a trainee at Manchester United, was a free agent after leaving the Bantams in January.
Dale boss Keith Hill told the club's official website: "He's got an abundance of ability and he's a naturally gifted player who wanted to come here.
"He had opportunities to go to other League Two clubs but feels as though this is the best place to re-start his career.
"He can play a number of roles including centre midfield which is his preferred position but, when you've got the likes of Andy Haworth, then I feel as though we need to address the balance on the opposite of the pitch."
Jones made 10 appearances for City this season, with his only goal coming against Port Vale on December 4.