Burton spent time on loan at the Fox's Biscuits Stadium last term and appeared four times for Craig Lingard's side as they reached the Championship play-offs.
The 19-year-old hooker impressed Lingard during his time on loan with the Bulldogs, doing enough to earn him a place in next season's squad.
“Oli has been a massive addition to our squad this year," said Lingard, who was named 2021 Championship Coach of the Year.
"He’s a real talented young player with a fantastic attitude and bags of enthusiasm. We’re thrilled to have him with us for 2022."
Burton is the second new arrival into Lingard's squad after winger Perry Whiteley joined from York City Knights.
“I’ve had a great time at Batley and am really happy to be joining for 2022," added Burton.
"I am excited to get going and kick on for the new season.”
Meanwhile, Batley's Elliot Hall has left the club to sign a contract with Championship rivals Bradford Bulls.