The 21-year-old has made two Premier League 2 appearances for the Seagulls this season, but will head to Huish Park for the remainder of the campaign, following a loan spell at Cork City last season.
Albion under-23 coach Simon Rusk said, “James benefited from spending the second half of last season playing in Ireland’s top division, and now he’ll get a taste of senior football in England.
“The National League will provide a different kind of test for James, which can only be a good thing.
“Yeovil will be hoping to bounce back after dropping out of the Football League, and it’s a great challenge and opportunity for James to take on."
After making a late substitute appearance for Albion’s first team in 2015, Tilley scored the winning goal in a Carabao Cup match against Barnet at the Amex Stadium two years later.
Tilley helped Albion’s under-23s win promotion to the Premier League 2 in 2018, before making 19 appearances for Cork during his loan spell earlier this year.