The former Derby County midfielder, 25, is embarking on a fresh chapter of his career at Oakwell following a fraught last season with the Rams, when he featured just twice.
After being released, his likely destination appeared to be Doncaster after linking up with them for an extended trial after a short spell at Barnsley at the start of pre-season.
But the Reds got back in touch a week ago to rekindle their interest with the collapse of John Ryan and Louis Tomlinson’s takeover at Rovers hampering their manager Paul Dickov’s quest for signings.
Bailey said: “If am brutally honest, no one really knew what was going on there.
“I got another call from my agent about Barnsley. I thought it had gone quiet there, which is why I went to Doncaster.
“I was actually playing golf and my phone went late last Tuesday night and my agent told me to go down to Barnsley. The rest is history.
“It was a no-brainer. The gaffer (Danny Wilson) showed a lot of interest in me and, given the last season I had at Derby, there is nothing more you want as a player than a manager who believes in you and wants you to be part of a team to be successful.
“Football is a cruel sport and waits for nobody and I am just thankful for the gaffer and want to repay that and help Barnsley get back to the Championship.
“Promotion is the aim at Barnsley, 100 per cent. It would be stupid if we are happy to be in mid-table or the play-offs. From what the gaffer is saying, we are going for it.”
Barnsley remain in the market for further signings after landing Bailey, Sam Winnall and Ross Turnbull.
The Reds are being strongly linked with striker Michael Higdon and winger Carl Baker and are also looking at trialist right-back Reece Brown.