On Monday, the D-Fenders announced they had acquired Williams via a waiver claim.
The D-Fenders, the Lakers' NBA Development League affiliate, are currently in second place in the West Division at 13-10. The actual Lakers are just 16-29 this season, down to fourth place in the Pacific Division.
Williams was cut by the Lakers before his contract became fully guaranteed for the 2013-14 season.
He earned $475,334 during his stretch with the team.
The Lakers recently signed D-Fenders standout Manny Harris a second 10-day contract. Through six games, Harris is averaging 8.3 points in 20.7 minutes a night.
Former NBA player Terrence Williams, originally drafted with the 11th overall pick in 2009 by the New Jersey Nets (now in Brooklyn), was named NBA D-League co-player of the week on Monday along with Isaiah Canaan of the Rio Grande Valley Vipers.
Williams averaged 27.3 points, 6.7 assists and 6.3 rebounds this past week for the D-Fenders, including a 39-point effort in a win over the Reno Bighorns on Friday.
Canaan, under contract with the Houston Rockets, is currently on assignment in the D-League.