Senators coach Dave Cameron said Phaneuf will play on the second defense pair with Cody Ceci and see ice time in all situations.
"We've got ourselves a good NHL defenseman," Cameron said. "So we should be excited about that."
Phaneuf, in his 11th NHL season, has three goals, 24 points and a minus-4 rating in 51 games this season.
"He plays hard. Lots of hard minutes," Senators right wing Chris Neil said. "So I'm glad that he's on our team."
Neil said he and Phaneuf had breakfast together Wednesday morning.
Phaneuf had a limited no-trade clause in his contract but said he didn't have to waive it to join the Senators.
"I'm excited to be part of this group," he said. " … I'm going to play when asked to and I'll do my job."
Neil said that Phaneuf's presence will benefit Ottawa's young players.
"Bringing in a veteran guy like Dion, who can step in and help the younger guys, he can step in and settle the game down," Neil said.
And make the Senators a more difficult opponent.
"They've added a guy who's been a real good player in this League for a long time," Red Wings coach Jeff Blashill said. "From the outside looking in it makes them a better hockey team. But we knew it was going to be a challenge [Wednesday] no matter what."