The 27-year-old spent two and a half years in Switzerland but with his contract coming to an end he has chosen to move to Spain, signing a three-year deal in Seville.
Steinhofer, who can play in defence or midfield, helped Basel to the defence of their Super League title last season as well as a Europa League semi-final place, but he cannot wait to start life at his new club.
"I am very happy to play for Betis," he told the club's official website. "This is a very important step in my life and in my football career.
"I know I am at a big club and a in a spectacular League. Betis have been a club that have been following me for a long time and I have to thank them."
The German becomes Pepe Mel's sixth signing ahead of the new season, with further arrivals expected before August.