The midfielder has agreed a 12-month deal, with the option of a further year, and joins the Under-23 squad under boss Steve Stone.
Garstang-based Phillips, who came through the youth academy at Liverpool before spending two years at Norwich City, has spent pre-season with Burnley.
And he has earned a contract and the chance to develop with the Clarets after becoming an integral part of Stone’s group on and off the pitch over the past month.
“I’m delighted to get a deal,” said Phillips, who was capped by England at Under-16 and Under-17 level.
“There’s been a lot of hard work. I went to Poland, which was a really good tour, and then I’ve come back here and really enjoyed it and had a few games, as well.
“I can’t wait for the season to start now and hopefully we’ll have a good start and I’ll get some games under my belt.
“It’s quite a young squad and hopefully I can help out a few of the younger lads moving forward. It’s a good group and I’m looking forward to what’s to come.”
A central midfielder, Phillips has played first-team football during loan spells from Norwich with League Two side Cambridge United and Scottish top-flight side Hamilton Academicals.
And he is now looking to add to that experience after starting a new career step with the Clarets.
“Hopefully I can get a chance to push on and hopefully get a chance to train with the first team and show the first-team manager what I can do,” he added.
“That’s what I’m here for to try and get as high up as I can and keep enjoying my football.”