The Broncos also signed Jeremiah Johnson back to their practice squad Monday.
Hester, a third-round pick out of LSU in 2008, played fullback for San Diego for four years. He had 94 rushes for 319 yards and also caught 55 passes for 308 yards.
McGahee, who injured his right knee last week, is eligible to return to the active roster for the AFC title game if the Broncos advance that far.
Johnson spent the entire season on the practice squad before being cut last week.
Copyright 2012 by The Associated Press