The 20-year-old forward is yet to make a first-team appearance for the Premier League club but has been involved in Everton's matchday squads.
Simms, who is cleared to play in the FA Cup at Brighton on Saturday, is a regular at under-23 level for the Toffees with eight goals in 12 games.
"He's a player I've been aware of for a few years," said boss Neil Critchley.
"Ellis has an outstanding goal record at under-18 and under-23 level and I believe he's now ready for this step into senior football.
"I'm delighted that he's chosen to sign for us, given that he had a number of options available. He will add something different at the top end of the pitch."