Bluebirds manager Ian Evatt is delighted to land the 29-year-old defender.
The Merseyside born player turned out last season for Guiseley and will add experience to the backline.
He spent his youth career at Everton before moving to Southampton before time at Port Vale and Plymouth.
But as Molyneux arrives, former Barrow keeper Arnold has confirmed he won’t be at Holker Street next year.
He joins John Askey, the former Macclesfield Town manager, at Shrewsbury in League One.
Evatt told us this week that the number one goal is winning the Bluebirds’ fans around after their dreadful home form last year.
“It’s a fresh start for everyone, and an opportunity to get these fantastic fans buying into their club again,” he said.
“Nobody wants a run like that. Your home fans are your bread and button, and it’s vital to make them proud.
“We need to build a bond with supporters and make them want to turn up again on a Saturday afternoon. We can do, and I’m determined that we will.”