The Clarets' only bit of business on deadline day was to acquire the 27-year-old on a loan deal from Stoke.
Dyche, who worked with Kightly when he was in charge of Watford, revealed he had to fight off interest from other clubs but is hoping Kightly can bolster a squad which has made a strong start to the Championship campaign.
"I know Michael well, having have worked with him before, and he is a player with really good energy," Dyche told Burnley's official website.
"Married with that is his obvious quality, both in terms of scoring goals and being a supplier from out wide.
"He has a lot of experience behind him, including games in the Premier League, and is a player I think can help us to progress further as a team.
"We used Michael out wide before, but he has great quality and ability, so it wouldn't surprise me if we can use him in a number of roles.
"Carrying a small squad, versatility is always key, but the main thing here is that we have to consider a player of his quality coming to our club.
"There were a lot of other clubs who thought they could land him and he has chosen us, which is great, especially having worked with us before and knowing how we operate.
"Now he wants to come and enjoy himself at Burnley and play some football."