The 34-year-old full-back made exactly 100 appearances for New Zealand and joins Lam's GUINNESS PRO12 side on a one-year contract.
Champions Cup qualification may seem a long way off for Connacht, having finished tenth in the PRO12 last season, but Lam insists with an All Black centurion in the mix there's no reason his squad cannot rise to the challenge.
"When I arrived last year I realised we were really low in experienced backs," he said.
"We've got some real talent in Robbie Henshaw, Jack Carty and the others but we needed someone to mentor them.
"When I spoke to Mils and talked about my vision for Connacht it was something that really appealed to him at this stage of his career - he'll be able to make a true difference.
"With the talent we've got in the backline it's all very well coaching them, but to have people on the field who can guide them through is important.
"I think you've seen that at some of the other Irish provinces - the impact that some of the foreign signings have had on the local guys has been massive. So we're just following that successful recipe."
With the new-look European Champions Cup offering seven places to GUINNESS PRO12 sides - and with each nation guaranteed a representative - Lam knows he will have to effectively guide Connacht to a top-six finish in order to achieve their goal.
And former Samoa international Lam believes reaching Europe's top tier this season would show the progress the young province has made in recent years.
"We don't really deserve to be [in the top half really] when you look at our budget and the number of internationals we have," he continued.
"When you look at that and make everything equal we should be finishing tenth, 11th or 12th.
"We want to make the Champions Cup next season, which would be massive but the process of how we achieve that is crucial as well, and that's what we are focussed on.
"The way the GUINNESS PRO12 is set up now, every game counts and that's what's exciting about it - there are no soft games as everybody is going to be scrambling to make the Champions Cup.
"If we were to qualify for that and Leinster were to win the PRO12 again, which would people say was the bigger achievement?
"I think many of them would say ours because it means we've had to work over and above our means to achieve that goal."
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