The midfielder came through the youth ranks at Parkhead and made his first-team debut in a 4-0 win against Ross County in December 2012.
He made just one more appearance more than a year ago at Motherwell and spent the second half of last season on loan to Cowdenbeath in the Scottish Championship.
Herron made only five appearances there, however, including a start in a 10-0 thrashing by title winners Hearts and was freed by Celtic at the end of the campaign.
The U21 international is the third Scot to switch to Bloomfield Road during this close season.
Kyle Letheren will work with the club’s new goalkeeping coach Bobby Mimms after moving from Dundee while Clark Robertson has signed from Aberdeen.
Herron told Blackpool’s official website: “After I spoke to the manager it was the only place I wanted to come.
“I had a lot of other options in Scotland and England, including in the Championship, but after hearing the progression the manager wants, for me it was the only place to come.
“I’ve been at Celtic since I was seven but it’s a different situation here and I’m here to win games. It’s a new challenge, I want to progress and help Blackpool, and hopefully Blackpool can help me.”