Ference joined the Oilers as a free agent in July to help fill a role in the team's top four defencemen.
The Edmonton native replaces Shawn Horcoff, who was traded to the Dallas Stars in July.
Ference, 34, had four goals and 13 points in 48 games for the Boston Bruins last season. He played on the team's second defence pairing during both a Stanley Cup run in 2011 and the return to the Final in 2013.
He becomes the 14th captain in team history.