The 17-year-old has moved to the Saint Mary’s stadium after declining to sign his first professional contract with Everton and the Toffees are due a compensation fee from the Saints because of Small’s age.
Small became Everton’s youngest ever player when he appeared for the final five minutes in an FA Cup tie against Sheffield Wednesday in January aged 16 years and 176 days.
That remained his only senior appearance for Everton before his move to Southampton.
On his move, Small said: "It's an unbelievable feeling. A big moment for me and my family, especially to join such a family-orientated club. It's an honour to be here and I can't wait to get started. When I came to visit I thought this is the best place for me to develop as a player and reach new levels to my game."
Saints boss Ralph Hasenhuttl added: “I am very pleased we have been able to bring in another talented young player. Especially when there were again a number of clubs who were interested.”
“I think our philosophy of how we develop these young players and give them their opportunities has been an important factor in this, and we are looking forward to working with Thierry and helping him make the most of his potential.
“We have already signed a player this summer with good experience at left-back in Romain Perraud. And Thierry’s arrival now gives us a very good balance and a strong additional option in that position, and this is encouraging that we now have this on both sides of our defence.”
