The Pebbell trackers, which are small enouigh to fit in the palm, have GPS technology which when paired with a smartphone can pinpoint their whereabouts.
They can be worn around the neck on a lanyard or attached to personal belongings such as a bag or dog lead.
Families can text the Pebbell's own distinctive number and will receive a response which has a map of the owner's location.
If they cannot get in touch with the Pebbell's owner, the device can pick up background sounds which can also help to pinpoint locations.
Dudley Council has already successfully introduced the technology to some of its residents, and Dudley Police's partnerships team have received funding to start piloting it.
Elizabeth Orange has seen the benefits of the Pebbell in keeping tabs on her 61-year-old uncle who had been reported as missing several times before receiving a device.
She said: "I didn't want to stop him going out after he was diagnosed with dementia; but it was a real worry when I couldn't get in touch with him. The police had to find him after he went missing a couple of times.
"But the Pebbell is fantastic as even if he doesn't answer his mobile I can keep a check on where he is. It has taken a lot of the anxiety away for me."
Each Pebbell is monitored by relatives or carers with the support of the council's Dudley Telecare Service which helps reduce the demand on police resources.
The West Midlands Police pilot is being led through Dudley partnership officers Andy Arnold and Sarah Nixon.
Missing persons officer, PC Arnold, said: "This latest technology is invaluable in keeping in touch with someone with dementia who can be prone to going missing.
"Those with dementia are able to keep their independence but can be tracked and give their loved ones and carers some peace of mind.
"The devices also reduce the demand on police resources in finding someone who has wandered off; as they can be quickly identified by family members or staff from Dudley Telecare Service."
Councillor Qadar Zada, cabinet lead for adult social care at Dudley Council said: "We are pleased to be working in partnership with West Midlands Police, providing support through our Dudley Telecare Service, to people with dementia.
"The pebbell is an innovative gadget which already supports many people across Dudley Borough who have dementia, and their families and carers.
"It really has proved that it can change peoples lives, providing freedom to people with dementia and reassurance and peace of mind to family members and carers."