Jeff Teague is expected to open the season as the Hawks' starting point guard. Pargo, who most recently played for the Chicago Bulls in the 2009-10 season, gives Atlanta another contender for a backup spot.
Pargo signed with the Bulls on March 20 but didn't appear in a game last season. He played in 63 games with Chicago in the 2009-10 season and averaged 5.5 points and 1.4 assists.
The 6-foot-1 Pargo previously played with the Bulls from 2004-06 and has also been with the Lakers, Raptors and Hornets.
Terms of the deal were not disclosed.