The 19-year-old has been brought in as cover for the injured Andy Robinson.
"He's tailor-made for that role behind the striker," manager Les Parry told BBC Radio Merseyside.
"He brings everything to us that we're looking for and he is the ideal person to bring in.
"We needed to fill that role and it's important to us. It's great that Everton have done that for us."
Baxter has been named in the squad for Saturday's match against Preston North End.