Simpson, 20, has previously featured at Preston North End and Hartlepool, and joins the Pitching In Northern Premier League Premier Division outfit from Cork City in Ireland.
He links up with Scarborough manager Darren Kelly for the second time, having featured for under him at Hyde United.
Kelly said: "I've kept in touch with Connor over the past couple of years and during the summer I was contacted by a few higher league clubs about his availability.
"He has been a huge target for me for quite some time and I'm absolutely delighted to bring him in.
"It would have been very easy for Connor to go higher on much bigger money, but I've had a good chat with him about the club and he is very excited about playing for us.
"I know what he is about, what he will bring to our team. He has a lot of strengths and I am looking forward to utilising them.
"He is a big, strong lad, who can hold the ball up, but he is also very quick.
"I can't wait to see him up front with the other excellent attacking options we have at the club."