Horsfield, 35 temporarily retired from football last season after being diagnosed with testicular cancer, but made a quick recovery to resume his playing career with Lincoln City.
He was released by the Imps at the end of the season, and will now be No.2 to Micky Adams at Vale Park.
Horsefield, who has scored 126 goals in his career but did not find the net in his 11 appearances for the Iron on loan from Sheffield United in 2008, will be registered as a player next season to provide striking cover .
"I am looking forward to it, it is something I have always wanted to do," Horsfield told Vale's official website.
"From turning 30 I have always wanted to come into the coaching side and Micky Adams has given me the chance to keep on playing.
"I want to play most of the games and Micky is going to teach me the ropes.
"The problems I have encountered over the last 12 months are now behind me.
"Getting cancer was something I had to get over. I got it, wanted to beat it and I did. Now I am just glad that I've got another chance in football."