McCrory becomes the third new arrival at the Pirelli Stadium this summer following his release by League Two rivals Dagenham & Redbridge.
The 22-year-old, who has been capped at Under-19 level by the Republic of Ireland, will provide competition for Aaron Webster for the left-back slot, with manager Gary Rowett hoping the battle for a first-team place will bring the best out of both players.
"First and foremost Damien has got good experience at our level and at the level up. He played 40-odd games for Dagenham in League One and he played in their play-off final win as well. He fits the bill of the type of player I'm looking for, he's young and hungry," said Rowett.
"We want some really good competition down that left-hand side. He can play in left midfield as well so it gives us that little bit of flexibility I'm looking for in certain areas.'
McCrory added: "I want to impress next season. Originally I was a left midfielder but I've been playing left-back for the last three years. I would say I'm attacking, but I do like to defend. I quite fancy a free-kick around goal as well. That's what I bring to the table, I'm looking forward to next season and I'm looking forward to the fresh start."