Phillips has featured in over 200 league games for Wrexham, but has struggled with injuries and only managaed 33 games in the past three seasons.
"I was very down and very disappointed when I was only offered a monthly contract," he explained.
"But, having talked to a few people, I'm going back and if things go well for me in the first month or so, there may be something we can work out.
"In any event, I need to be playing to put myself in the shop window and I think I will get the opportunity to show what I'm capable of."