Hodges has had an unhappy time with Rochdale after joining them from United last summer, and joined Rovers on loan for the end of the season.
He was told that he could leave Spotland on a free transfer, and will put pen to paper on a two year deal with Rovers in the coming week.
Rovers manager Graydon said: "Lee will sign for us subject to the results of a medical which will take place before the end of next week.
"He is a great player and has been a real plus for us since he's been here.
"He has got some terrific talent and although he needs to catch up on the physical side a little, I am sure he will be a major asset for us next season, and I am delighted that he has agreed to join us."
Hodges will be back in North Lincolnshire on Monday night when he plays in a guest XI against Brigg Town for manager Raz Clayton's testimonial.
The side will be managed by former Iron defender Neil Cox, and also includes Middlesbrough midfielder Mark Wilson and Grimsby Town player-manager Paul Groves.
The game kicks off at 7.15PM at The Hawthorns, and The Zebras will be hoping to show off the FA Vase trophy - they face AFC Sudbury later this afternoon in the final at Upton Park.