The deal also includes the option of a further 12 months for the son of former Bramall Lane favourite Tony Philliskirk, who scored five times in six appearances for United's second string last season and made the first-team bench on several occasions.
Philliskirk said: "I am delighted to join permanently after a successful loan spell. I really enjoyed my time here last season and did well for the reserves, while it was great to get an opportunity to get in the first team towards the end of the campaign.
"I am now looking forward to a tough pre-season and working hard to show people what I am capable of."
Blades boss Danny Wilson added: "I played with his father and if he is half the player Tony was then we have got a talent on our hands.”