The 26-year-old was wanted by various clubs but has joined the Dens Park club and will link up with former teammate Simon Murray again, following their time together at Ross County.
Dhanda moved to Hearts on a three-year deal last summer and played 33 times last season, scoring twice.
He said: “Simon has been phoning me at least seven times a day and has been on my case for quite a while. Especially in the last couple of days, he’s been phoning me a lot, making sure I come here.
“At Ross County, me and Simon had a really good relationship on the pitch, and I assisted him quite a few times. He was someone that was great to play with, and he’s one of my favourite players that I’ve played with. But we are also really good friends off the pitch, and when he wanted to get me here, I trusted him because he spoke so highly of the place.”
Dhanda is currently serving a two-match suspension, meaning he will be unable to feature in Saturday’s match against Rangers, but will be available for Dundee’s next league match against Kilmarnock.