The 20-year-old has made 14 appearances for his parent club but spent all of last season out on loan, first at Brentford before going to Peterborough.
Nugent has links to Yeovil as his father, Richard, played for the Glovers in the 1995-96 season and also worked under boss Gary Johnson at Kettering.
"I can remember Ben as a 10-year-old smashing up my living room playing football as a kid," said Johnson.
"I've always been interested in his career.
"He had a fantastic year at Cardiff under Malky Mackay in the Championship when they got promoted. He's 6ft 5ins, he's left-footed and he's a good player."