NSW Origin representative Dugan had his Raiders contract torn up in March after flouting a club alcohol ban – his last of a series of disciplinary breaches.
But Dragons bosses are confident Dugan can turn his fortunes around.
“I am extremely appreciative of the opportunity that the Dragons and NRL have provided me and I am really excited about the next chapter of my career,” said Dugan.
“I am really keen to get back to training, in a team environment and do whatever it takes to get back out on off field.
“I have played with a few of the Dragons boys before and am keen to meet the others and play my part in the team.
“I grew up a Dragons fan, my whole family supports the Dragons and I am well aware of the pride and history associated with the Club and what the Club expects from me.”
Club chief executive Peter Doust said ‘due dilligence’ had been followed in signing Dugan.
“We conducted numerous formal interviews with Josh and had detailed discussions with the NRL, including the review of the outcomes of rehabilitation processes that have been undertaken regularly, over more than nine weeks,” said Doust.
“We believe it is important to note that Josh’s breaches were not of an illegal nature, but rather breaches arising due to poor discipline and decisions.”
He added: “We believe we can deliver a fresh start, supported by our club’s well-established processes in player welfare management with ongoing education programs, continuing with what Josh has started at the NRL.”