Halifax-born Ridehalgh, who has signed a two-year deal, arrives after eight seasons at Tranmere Rovers, where he enjoyed two promotion campaigns.
Ridehalgh, 30, started his career at City's West Yorkshire neighbours Huddersfield and has also had loan spells at Rotherham United, Swindon Town and Chesterfield.
He said: “I am really glad to have got the deal done. I cannot wait to get going and am really looking forward to the season ahead.
“Bradford City is a massive football club. I am local to the area and know exactly what both the supporters and manager require.
“I played against a Derek Adams team in the play-offs last season. His sides are hard working and strong mentally, so I know what is expected.
“We are in League Two at the moment, but I know our aim is to go further than this division.
“It is clearly an ambitious football club. The new manager has come in and has past experience of getting promoted from this league. There are a few players in the camp who have been there and done it as well.
“I think this is a Championship club, so hopefully this year we can be right up there in the league.”
Bantams boss Derek Adams said: “We are delighted to be welcoming Liam on board as our fifth new recruit of the summer.
“When I first arrived at the club, he was one of the very first names on our list, so to have got the deal completed ahead of pre-season is hugely encouraging.
“He is a well-cultured player with plenty of quality and experience at left-back, having played close to 400 games in his career.
“Liam is from around the area and lives locally, so is well aware of what this football club means and what is required to represent it."