The 23-year-old pens a two-and-a-half-year deal and joins the club for an undisclosed fee.
The Preston-born defender began his youth career at Blackburn Rovers and then Liverpool before switching to Blackpool, where he made his first team debut in 2014. Prior to signing his professional contract with the Tangerines, he aided the youth side to win the junior league title in 2014.
He made a total of four appearances for the side before making the switch to Sheffield United in 2014. While with the Blades, he made a total of 34 appearances, along with a further four on loan at Tranmere Rovers in 2015.
McGahey made the move to Rochdale in June 2016 and has made 127 appearances in all competitions.
