The 23-year-old made seven appearances on loan for Posh at the end of last season without tasting defeat and Ferguson is delighted to have secured his signature on a three-year-deal.
He told the club's official website: "Lee was unlucky with injury when he joined us on loan but you could see from his performances when he did play that he is a good player.
"I am pleased everything is wrapped up and he is a good addition to the squad."
Source: Team_Talk