The 22-year-old agrees a two-year deal at Huish Park having spent the whole of pre-season with the Glovers.
Brazil-born Santos spent time at Southampton and Stoke City before progressing through the Academy setup at Bristol Rovers.
Having made his EFL debut as a 17-year-old, the versatile midfielder signed his first professional contract at the Memorial Ground in 2013 before becoming a regular throughout the 2013/14 season.
Santos impressed throughout the campaign, leading to then Premier League outfit Hull City chasing his signature, before joining Sky Bet Championship side Derby County in the summer of 2014 for an undisclosed fee.
The Brazilian was handed his Rams debut in the first month of the season by Steve McClaren and went on to spend time away from Pride Park on loan at Notts County and Eastleigh.
He becomes Town’s eighth summer signing.
“Alefe has been unlucky at Derby with a high turnover of managers, but I think he’s a special talent,” manager Darren Way told YTFC.net.
“It’s up to him now to take this opportunity and work extremely hard to make it happen.”
Would you like to sponsor Alefe this season? Please contact Commercial Manager Dave Linney on 01935 847872 or email DLinney@ytfc.net.