The 19-year-old becomes the Bees' second signing on Friday following the arrival of Jose Peleteiro Ramallo from Celta Vigo.
Toral joined Arsenal from Spanish giants Barcelona in 2011 at the age of 16 and has gone on to represent the Gunners at Under-18, Under-19 and Under-21 level.
"Jon is a very talented attacking midfield player," Brentford boss Mark Warburton told the official club website.
"He is an excellent addition to our group.
"Jon has come through a couple of nasty injuries, it is great to see him fully fit and he can now start to show his undoubted potential."