Hollingsworth, 24, captained Grantham for the final time in their defeat to Warrington Town at the weekend.
The former Nottingham Forest youth player has previously played for Boston United.
Gladiators boss Dave Frecklington said: "Michael's experienced at this level and knows this league inside out.
"He played a big part in Grantham reaching the play off final last season and has also played in the league higher.
"At 24 years old he's coming into his best years, he's mobile, aggressive and can play so he will add good competition for the players we have in the centre of the park. He's a great character and a winner, so he fits the type of player we like to have at the club."
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