The 20-year-old is manager Steven Gerrard's second acquisition this summer, after Romanian midfielder Ianis Hagi.
Bassey departs Leicester City without making an official appearance for the first team though he was called up to train with the squad several times.
He is excited about the prospect of working with Liverpool and England legend Gerrard next season.
"It’s amazing. Steven Gerrard has always been one of my idols and a person I have looked up to when I was younger," Bassey stated.
"He is a legend in the game, an England legend and it is like something out of a movie watching one of the legends play football and then have the opportunity to work with him.
"I just hope I can learn from him, and when I knew Rangers and Steven Gerrard were in for me, it was a no-brainer for me."
Baasey joined Leicester City at U16 level and signed his first professional contract with the club in 2018.
Ifeanyi Emmanuel
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