The former Ross County and AFC Wimbledon player began his career with St Mirren and also had a loan spell with East Stirlingshire in 2012.
During his time with the Staggies Kelly lifted the 2018/19 Championship title before departing the Highland club at the end of last season.
The Bairns had been working hard to finalise a deal for defensive reinforcement and have done so with the Glasgow native who can play at both left back and left sided centre back.
Bairns co-manager Lee Miller said: “We’re delighted to get the deal done and over the line. Sean’s one we’ve been monitoring for wee while now, he’s obviously got premiership experience and knows how to win a league after winning the Championship with Ross County.”“He can play a number of positions including left centre-back and left back. His delivery with his left foot is class and he gives us a great option and real competition for places.”
Kelly is expected to go straight in to the squad for Saturday's League 1 match with East Fife.