Like striker Kyle Vassell, signed earlier in the day, the versatile left-sided player joins Pool on a one-year contract, with the option of a further 12 months.
Nottingham-born Daniel was released by Port Vale last month after two seasons with the Potteries club.
He made 55 appearances in his two seasons at Vale Park, scoring six goals, but he ended last season being loaned back to his previous club Mansfield Town and scoring twice in nine games.
One of his final appearances for Vale was in their 1-0 win at Blackpool in January.
On becoming manager Gary Bowyer’s third Pool signing, Daniel told the Blackpool FC website: ”This is a new challenge at Blackpool. Hopefully I can come here, do well for the team and we can push on for promotion and get this club back to where it should be.”
Manager Bowyer said: “Colin had the choice of a few clubs and I’m pleased that he’s opted to join us, He has good experience at League One and League Two level and is comfortable playing in a number of positions.
“He offers pace, energy and creativity out wide and will be a great asset to have in the team.”