The 21-year-old midfielder fills the third and final DP slot on LAFC's roster, joining Carlos Vela and Diego Rossi.
"Andre is a player we identified quite some time ago as someone we felt would be the right fit for LAFC," LAFC general manager John Thorrington said in a news release. "We are grateful for the support of ownership, and the acquisition of Andre is yet another statement of the type of club and team we are building.
"It is rare, if not unprecedented, for a player of his age, pedigree, and options to join MLS, and we know he will make our city and fans proud."
Horta has spent the 2017-18 season on loan to Portuguese top-flight side Braga, recording one goal and six assists in 15 league matches. He also has made five appearances for the club in Europa League action.
A veteran of 23 caps for Portugal's youth sides, Horta played 10 league matches and appeared in two Champions League contests as Benfica won a domestic treble in the 2016-17 campaign.
"Andre is a technically gifted player with enormous versatility," LAFC coach Bob Bradley said. "He is young and dynamic, and with his experience in Portugal we believe he will continue to develop into a top-class player."
LAFC, which has won the first two matches of its inaugural season, faces the LA Galaxy on Saturday in the clubs' first derby.