The 23-year-old winger – a former Crewe team-mate of fellow new arrival Tom Lowery – completed his medical remotely on Saturday.
Blues boss Danny Cowley said: “We’re really pleased to be able to bring Owen to the club and are looking forward to working with him.
“He was fantastic for Crewe, firstly to get them into League One and then got into double figures for goals the next season to earn a move to Blackpool.
“Owen brings creativity and intelligence, while his combination play is very good and he gives us pace in the transition.
“He’s also brilliant at getting in at the back post to provide a real goal threat and he has a tenacious edge, which I like to see in players.
“Owen obviously knows Tom and that can help. I’m sure they’ll support each other and I know the rest of the boys are pleased to have them here.
“They will certainly fit right in with our group because of their humility and also the love they have for the game.”
Dale progressed through the ranks with the Railwaymen, netting 15 goals in 109 appearances for the club.
He moved to Blackpool on loan in September 2021 before making the switch permanent a few months later.
Dale netted on his debut in a 3-2 Championship victory at Reading and featured 14 times for the club last term.