The former Real Madrid youngster, 22, faced Reading in a pre-season clash at the Madejski Stadium this summer.
Manager Steve Clarke told the club website: “Alex Fernandez is a talented young footballer who can play in different positions throughout the midfield area.
“Any footballer who has come through the youth system at Real Madrid always gets a good football education and will have a good understanding of the game.
“When we knew we could get him on loan for a season it was too good an opportunity to miss. He is another creative player who will add to the competition for places and, as he settles and adjusts to a new challenge in his career, I’m confident that Alex will prove be another good addition to our squad.”