The 30-year-old, who has played 88 AFL games with three clubs, has not featured at the top level since an ill-fated stint with Melbourne in 2020.
It ended when he left the Demons' Gold Coast hub and breached the league's COVID-19 protocols, leading to a four-match suspension and $50,000 fine.
Bennell then announced his retirement from the game.
However, a recent stint in the Northern Territory playing with the Tiwi Bombers has reignited Bennell's passion to play.
Port Melbourne confirmed their high-profile acquisition on Thursday.
"I'm really excited to get down to Melbourne to meet my new teammates and coaching staff for 2023," Bennell said in a club statement.
"I'm just happy to be playing footy at a high level again and whatever happens on the way is a bonus, so I'm going to enjoy this one."
Peel Thunder product Bennell was originally drafted by Gold Coast in 2010 and played his best football to date with the Suns.
He kicked a career-high six goals in a win over Geelong in 2014 but never reached his potential amid off-field issues and a series of soft tissue injuries.
Bennell played 81 games with Gold Coast, two with Fremantle and five with Melbourne.
Port Melbourne football manager Glenn Balmforth said the club was excited to have the silky-skilled speedster on board.
"When I spoke to Harley a few weeks ago and it was very evident to me from the start that he has a strong focus and desire to play at the highest level," Balmforth said.
"He can and play a major role in contributing to group success, which is exactly what we want at our club.
"For us to have the opportunity to bring to our club somebody of Harley's calibre with his experience and on-field ability at this stage in the pre-season is very exciting.
"We can't wait for him to get down to Melbourne and get started, as he is sure to excite the red and blue faithful."
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