"I went through pre-season preparations with Basel and took part in the first round of the Swiss league last week so I am in good shape," the defender told Dynamo's official website on Friday.
Dragovic helped Basel reach the semi-finals of the Europa League last season.
The Serbian-born player made his debut for Austria in a World Cup qualifier against the country of his birth in June 2009.
(Reporting by Igor Nitsak; editing by Tony Jimenez)
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