The 50 year old made her name as Frances 'Baby' Houseman in the 1987 classic, opposite Patrick Swayze, and has already been touted as a favourite among fellow competitors David Hasselhoff, Michael Bolton, R&B singer Brandy and veteran actress Florence Henderson.
But Grey admits she doesn't feel like a favourite, explaining she only took the challenge on to prove to her young daughter Stella it's important to face you fears head on.
She tells UsMagazine.com, "We all have different strengths and weaknesses, and I've got a handful of both... I thought it would be a really great way to challenge myself and show by example to my eight year old what it's like to watch mommy walk through her fears... (but) I'm scared silly."
Other stars preparing to hit the dancefloor for the 10th season of the show include Audrina Patridge, comedienne Margaret Cho, politician Sarah Palin's daughter Bristol and retired football star Kurt Warner.
The new Dancing with the Stars season begins in America on 20 September (10).