Ridnour played in 61 games with Milwaukee and Charlotte a year ago, averaging 5.0 points, 2.9 assists and 1.6 rebounds per game.
"We're extremely excited to welcome Luke (Ridnour) and his family to Orlando," general manager Rob Hennigan said. "Luke is a proven player in this league who is well-respected as a teammate and competitor. The depth and veteran experience he will provide to our backcourt will help our team continue to grow."
Over his 11-year career with Seattle, Minnesota, Milwaukee and Charlotte, Ridnour has career averages of 9.6 points, 4.6 assists and 2.3 rebounds per game.