The England youth international will join us for the start of pre-season training in July.
Huddlestone, who only turned 18 in December, has already racked up 80 appearances for the Rams in the Coca-Cola Championship/First Division having burst onto the scene as a 16-year-old last season.
Sporting director Frank Arnesen said: "He demonstrates great intelligence on the field and his awareness is so outstanding that he reads the game well.
"One of his greatest strengths is his passing, over short and long range. He's already the best in the country in his age group.
"All in all he's a very talented player. Off the field he's down to earth and on it he's very mature, he just goes out there and does his job well.
"He's already played for England at Under-19 level with Phil Ifil."
Nottingham-born Huddlestone was part of the England squad that reached the semi-finals of the European Under-17 Championships in 2003.
The club is delighted to announce that it has reached agreement with Derby County for the transfer of Tom Huddlestone at the end of the season.