Ryder is likely to open batting in the Twenty20 domestic competition for CD, especially after Jamie How retired last summer, but Malan will keep his options open with the lefthander likely to slot anywhere from No1 to No4 in the one-dayers.
"He has more than 100 games in all three formats so he'll be somebody the young boys can feed off as well," he said.
The former Black Cap's career began with the Stags as an 18-year-old in 2002-03.
After an acrimonious falling out with CD, the former Napier Boys' High School pupil headed off to the Wellington Firebirds for nine seasons but failed to exorcise his drinking demons that saw NZ Cricket eventually erase him from the international equation.
Malan said CD's goal was to put the former Complete Flooring Napier Technical Old Boys (NTOB) premier club cricketer on the park to display his prowess.
"You never know what the future holds. He has the form to find his way back to the international stage. We'll just have to tempt him when he's part of the squad, who will start coming in from October 1."
Malan said from NZ Cricket's perspective the desire was to ensure the domestic competition would be the best it could be and Ryder would add value to that.
"He's still a New Zealand player in Essex as a professional with an international record.
"We haven't contracted him but he's just signed his release from Otago to us."
Malan said it would be an exciting time in the white-ball formats this summer for CD, who finished fifth in the T20s and last in the four-day Plunket Shield competition.
"He's taken more than 70 wickets for Essex so by all account he's playing good cricket.
"He's at the peak of his career, I reckon, so he has a good few years left in him," said the South African, aiming to help Ryder sharpen his skills.
Ryder said: "CD gave me my first opportunity in cricket so I'm looking forward to returning and playing for the Stags again this summer."
Otago coach Nathan King told Otago Daily Times there was "no ill blood" between the Volts and Ryder, who racked up 1228 Plunket Shield runs at an average of 58.47, including five 100s and six 50s last season.
However, outgoing chief executive Ross Dykes summed it up when he said Ryder was "not a happy chappy".
Ryder skipped a Volts game to take part in a farcical charity boxing event and was suspended for the final round of the shield for breaching the code of conduct.
"He goes with my blessing," King said yesterday. "I've been in contact and wished him all the best. Jesse's thanked Otago cricket for what we've done for him.
"We could be on the receiving end this summer but that's just the way it goes."