The Portuguese club did not disclose how much they paid for the 20-year-old winger but said the player's buyout clause in his new contract was 45 millions euros.
Liberian-born John stood out in a Champions League qualifying match between Benfica and Twente last year.
Although Benfica advanced, John set up two goals and impressed with his speed and technique.
Benfica boast several attacking midfielders including Argentines Pablo Aimar and Nicolas Gaitan, Brazilian
John is the younger brother of former Twente and Fulham forward Collins John.