That put him two clear of Denmark's Soren Kjeldsen and Donaldson who still remains on course for a Ryder Cup spot.
"It wasn’t my best ball striking round but it was a good scoring round, that’s for sure,” said Dredge, who was runner-up in Denmark last weekend.
“I lost my card at the end of 2012 and had a few health problems to sort out.
“This year my category is quite low, so when I do play I've got to go out and play well. I'm sorting things out and hopefully it will soon be gone."
Donaldson, 38, had led after the first two rounds and went into Saturday's third day with a one-shot lead over France's Gregory Bourdy.
Dredge turned up the pressure on the closing holes with birdies on the 14th and 15th.
He missed an eight foot putt at the last which would have seen the two-time European Tour winner equal the course record.
But Donaldson then bogeyed the last to give his compatriot a two-shot lead as the 41-year-old seeks a first win since 2006.