Young was a free agent after his second spell at Aston Villa ended at the conclusion of the 2022/2023 season.
The 38-year-old played 29 Premier League games and scored one goal last season as Villa finished seventh.
Everton manager Sean Dyche played with Young when the winger-turned-defender was blossoming at Watford.
"I'm delighted to be an Everton player and to have joined this massive club," Young told evertontv.
"I can't wait for the season to start and walking out at Goodison Park is going to be an unbelievable feeling and to hear the passionate fans behind me.
"The manager was important in me signing. I know him and know what his passion and desire is like. His honesty, will to work hard and his hunger for the game is second to none.
"I know things haven't gone too well for Everton in the past couple of seasons but the manager's ambition, speaking to him and hearing what he wants to do to change the club around, was a key factor in my decision.
"The other is the size of Everton. It's a massive club and the fanbase is one of the best. Having them behind me is a fantastic opportunity. I'm delighted to get the opportunity to be here and I just want to get started now."
Dyche added: "Ashley is a top-class professional whose record of team and personal achievements during a successful career make him an excellent addition to our squad.
"I've known Ashley for many years, having been his captain when he first broke through at Watford, and his qualities both on and off the pitch will prove valuable."
Young counts Manchester United and Inter Milan among his former clubs and has been capped 39 times by the England national team.
