The 19-year-old moved to Oldham from Stoke last season, but failed to make an appearance.
He spent the second half of the 2015-16 campaign on loan at National League North side Chorley.
Vassell is the second Walsall signing to join Chester after goalkeeper Liam Roberts, and stays until 1 January.
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Chester have signed defender Theo Vassell on loan from League One side Walsall, three days after he joined the Saddlers on a one-year deal.