"Ishmel is a very talented young player that has lost his way a little bit," said Cobblers boss Aidy Boothroyd after snapping up the 24-year-old, a free agent after leaving Notts County.
"He needs a platform to show what he is all about, and I think we can give him that."
The manager's words echo those of Martin Allen who, as Notts County boss, handed Demontagnac a one-year deal at Meadow Lane last summer.
He said at the time: "Ishmel definitely has ability and I've given him an incentivised contract hoping he is going to step up to the mark.
"He has speed and he has an attitude, but I have met him and I think and I hope we can work well together."
Demontagnac went on to make only two starts for the Magpies and was allowed to leave the club by new manager Keith Curle.