MS-DOS 6.22 only uses CHS (cylinder/head/sector) addressing to access disks, so it doesn't really matter if the BIOS supports LBA addressing. The CHS BIOS interfaces MS-DOS uses to access disk support drives up to just under 8GB, so this also the about limit for the MS-DOS. (A bug in MS-DOS means that it crashes if a drive has 256 heads, so it's limit is a bit smaller than the BIOS limit but still almost 8GB.)
The limit you've encountered to due to the intersection of the BIOS and IDE limits on CHS addressing being much less than either individually. The BIOS supports addressing up 1024 cylinders, 256 heads and 63 sectors, while IDE supports up to 65536 cylinders, 16 heads and 255 sectors. Taking the minimum of these three numbers (1024/16/255) gives you the 504MB limit.
To get around the 504MB limit many BIOSes supported CHS translation, where they converted BIOS CHS addresses to IDE CHS addresses using some sort of transformation. Apparently though your BIOS doesn't support this, otherwise the drive probably would've worked. You should check to see if your BIOS has some sort of "large" drive support you can enable.
If you're not booting off the hard drive then I think there were drivers for MS-DOS that performed CHS translation. According an old Microsoft KB article (KB126855) I found "SpeedStor from Storage Dimensions, EZ-Drive from Micro House, and Disk Manager from OnTrack Computer Systems" are possibilities. An IDE controller won't work unless it has its own boot ROM, one that can perform CHS translation.