Reid, 23, agreed to join the club last season but injury prevented him from making his debut.
Manager Craig Robinson said: “Dom Reid is a great addition to the squad that will add pace and strength to our attacking options.
“He was unfortunate last season with injury but the break has given him time to get that right and I’m looking forward to him finally putting on a COLFC shirt and get him playing!”
A former Rochdale youth player, Reid has had spells with Warrington Town, Marine, AFC Fylde and Prescot Cables.
Reid added: “I’m pleased to sign again for the Purps. It was frustrating that an injury stopped me from making my debut last year but I’m glad to be back and looking forward to the new season.”
Meanwhile, the Purps have also signed former Everton and Hull City youngster James Yates.
Yates, 22, had a spell at Witton Albio before a short period out of the game.
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