The 22-year-old can play on either side of defence and is Southampton's first signing of the January transfer window.
"I come here looking to help the club improve and improve myself," he told the club's official website. "I just want to win as many games as possible and enjoy playing football.
“I had a chat with the manager and he assured me I was the type of player he liked and I got that feeling from watching Southampton that I could fit in well.”
Walker-Peters has made 12 Premier League appearances, assisting five goals, having graduated from Spurs' Academy.
He could make his Saints debut at Liverpool on Saturday.