Bowden, 28, a former Highlanders and Crusaders representative, has played in England since 2010.
"I'm really excited to be returning home along with my four-month-old baby and wife. I had opportunities to stay in the UK but coming back to be around my family and playing for the Blues is something I've always wanted to do," he said.
Bowden said he was comfortable playing at either first or second five-eighths for the Blues. Pivot has long been an area of concern for the franchise.
"I played 10 for London Irish and mostly 12 for Leicester so I'm comfortable at either," he said.
"I'm sure the Blues will have their ideas -- I'd like to play 10 but I'm happy to play wherever is best for the team. There are plenty of talented players in the Blues backline and hopefully I can offer some guidance and experience there."
Bowden has represented New Zealand at schools, under-17, under-19 and under-21 levels and Blues head coach Sir John Kirwan said he was thrilled to welcome his new recruit.
"Dan has a great skill set and is really keen to come back and have another crack at Super Rugby in New Zealand so we're really excited to have him," he said.
Bowden is in Auckland and will head to Japan before returning to join the Blues for pre-season training in January.
Meanwhile, Blues first-five Chris Noakes suffered a suspected partial rupture of the distal biceps tendon in his right arm during a match for the Blues development team on Friday. He was due to have an ultrasound today.
North Harbour outside back Marty Swart, brought into the Blues squad as a replacement player for the injured Charles Piutau, sustained a suspected ACL injury to his knee playing club rugby on Saturday and was also due to have an MRI scan this afternoon.
Lock Tom Donnelly suffered a concussion during the Blues' loss to the Sharks on Friday night but has passed all the concussion tests and should be available to face the Hurricanes on Saturday.
Halfback Piri Weepu should also be available this Saturday subject to him completing all the fitness and training sessions following a groin strain he suffered playing club rugby on May 17.
