The Premier League club were alerted to the 21-year-old's potential by former Toronto coach Ryan Nelson, who played under West Ham boss Sam Allardyce at Blackburn Rovers.
Henry, a Canada international, came through the ranks at Toronto and he has penned a long-term contract at Upton Park, with the exact length not disclosed.
And Allardyce is convinced that West Ham have secured an exciting prospect.
"Ryan was my captain at Blackburn for a couple of years and he rang us and told us about Doneil," said Allardyce.
"With a little coaching from us and work in terms of how to defend in the Premier League, Ryan says he has all the attributes to be a good player.
"We have invested in him for the near future, so we do hope he can make some sort of appearance this season if he settles in and does as well as Ryan thinks he will.
"If not, we hope he is certainly one for the future."
Henry has promised West Ham fans that he is a committed player.
"I love a tackle and I just want to defend hard," he said.
"It feels good to be given the opportunity to come and train and see what it's like to be part of a Premier League team and I just want to get started and get into the team real soon."
