The Danish defender, on loan at Hillsborough at the end of last season, was released from Manchester City.
Wednesday were looking at signing the player after impressing at S6 but it is believed that they pulled out of a deal because of his injury record.
Bischoff told City's official site: "I came here three weeks ago and spoke to the manager and he gave me a really good impression of the club.
"He took me around and talked to me about the ambitions of Coventry City and that really convinced me."