The 22-year-old, who has been training with Dean Saunders' squad, could be involved in Saturday's home game with Shrewsbury.
York-born Woods started his career at Leeds and was involved in a controversial switch to Chelsea as a 16-year-old with fellow Elland Road youngsters Tom Taiwo and Danny Rose.
Leeds accused Chelsea of tapping up the trio, which led to the London club paying a reported £5million compensation in an out-of-court settlement.
Woods was a regular for Chelsea's reserves and although he became one of their youngest first-team players when making his debut against Macclesfield in an FA Cup tie in 2007, he never made a league appearance and was released at the end of the 2010/11 season.
He joined Yeovil on a non-contract basis in February 2012, but failed to win a permanent deal at Huish Park.