Taylor, who has been sidelined with a calf strain suffered in the test against Zimbabwe in January, moves after one season with the Rajasthan Royals for the upcoming season of the Twenty20 tournament.
He will join New Zealand paceman Doug Bracewell at the franchise which boasts former England captain Kevin Pietersen, Virender Sehwag, David Warner and Mahela Jayawardene in its batting line-up.
"We all know what a quality player Ross is and we are happy that he will be with us this season," team mentor TA Sekar said.
The Daredevils will be Taylor's third team in the IPL after playing for the Bangalore Royal Challengers for the first three editions of the competition.
He is on track to be fit to face South Africa in the first test starting in Dunedin on March 7.
