The 21-year-old has put pen to paper on a two-and-a-half year contract after the two clubs agreed an undisclosed fee, with Huddersfield having the option of a further year.
Lolley is expected to be included in Mark Robins' squad for Saturday's league game at QPR, where club-record signing Nahki Wells hopes to make his full debut after arriving on Friday.
"There's been a lot of speculation about this deal in recent days and so we're delighted to add Joe to our squad at last," Robins told the club's official website.
"He's a promising talent and was highly sought-after, so it is testament to the club that he has chosen to come to Huddersfield Town.
"Joe can play off the right side of the attack or through the centre as he possesses good pace and ability on the ball, but most importantly he has an eye for goal, as his extraordinary goalscoring record in the lower echelons of English football shows. "
Lolley has scored 11 goals in 25 appearances for Kidderminster this season, including a hat-trick in Saturday's 3-0 home win over Salisbury, after joining last summer from Littleton. He scored 88 goals in 83 games for the Midland Combination side.