
The song, kept off the top by George Michael's Careless Whisper in 1984, won the title in a 2003 Q magazine poll.
The video for Agadoo (Mambo 2009 remix) was directed by Bruce Jones, who played Coronation Street's Les Battersby.
Black Lace singer Dene Michael said: "With all the doom and gloom in the world, this is just what we need."
Michael is joined on the record, released on Monday, by new member Ian Robinson.
The band's other hits include Superman, Do The Conga and I Am The Music Man.
"It sounded like the school disco you were forced to attend, your middle-aged relatives forming a conga at a wedding party, a travelling DJ act based in Wolverhampton, every party cliche you ever heard," the panel added.
The Q magazine panel summed up the 1984 original as "magnificently dreadful".