Hernandez, 27, joins the Welsh club for £5.55m and will be seen as a like-for-like replacement for Scott Sinclair, who moved to Manchester City earlier today.
"It was my target as soon as I knew there was interest," the winger told Swansea's website. "There were offers from other clubs, but this was the only club I wanted to join.
"I want to thank the club and Michael Laudrup for making me feel like a very important player. Now I want to repay that faith on the football field.
"I watched the game against West Ham on TV last week and they played some good football. I also liked the atmosphere; the fans are good and together with Michael Laudrup's presence it's an exciting package."
Hernandez joined Valencia from Getafe in 2008, netting 16 goals in 111 appearances during a four-year spell at the Mestalla.