Teague, 24, played 390 games for the Victory Park club and becomes the Dolly Blues’ first signing of the summer.
Manager Mark Fell said: “We probably didn’t have the defensive depth we needed last season and despite having the most clean sheets in the league, I felt we needed at least 1, probably 2 more defenders in.
“Teaguey has all the attributes we look for, he’s got a great attitude, great defensive qualities and is an outstanding leader. It’s been very straightforward, he wanted to play for Lancaster and we wanted him here.”
Teague was part of the Chorley sides that earned promotion from the Northern Premier League and National League North.
He previously had spells with Macclesfield Town, Tamworth (loan) and Hyde (loan).
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