Storer, 18, who arrived on a short-term contract from Stevenage in April, signed a new Blues deal in August after scoring seven times in pre-season.
But he was then sent off in the home defeat by Wolves on only his second Championship appearance.
He has since made just one late substitute appearance for Blues.
Storer's move to Yeovil will be formally completed on New Year's Day when the transfer window opens.
"Jack is a player who has a big future in the game and will add to my options here," Glovers boss Darren Way told the club website.
"This club has a reputation for developing players so hopefully he can come in and follow in the footsteps of others who have been here before."
Birmingham City's teenage striker Jack Storer has agreed to join League Two side Yeovil Town on loan for the rest of the season.