He agreed to terms with Jacksonville on a three-year $13.5 million that was to pay him $6 million guaranteed, but the deal collapsed.
Dennard, 5-foot-11 and 205 pounds, will allow the Falcons to move Kendall Sheffield outside. The Falcons allowed starting left cornerback Desmond Trufant to leave in free agency. He signed with Detroit.
The Falcons can have Sheffield, third-year man Isaiah Oliver and Terrell compete for the starting outside positions.
Dennard was the 22nd highest-graded cornerback in the league last season, according to Pro Football Focus.
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