The musician penned the haunting track, He Was Alone, after spending time at a refugee camp in southern Turkey on the Turkish/Syrian border.
"We see this human disaster and we see numbers in millions and we're trying to make sense of it," he told the BBC.
"We've forgotten how to understand the human story behind this."
Three-year-old Syrian boy Kurdi made headlines around the world in September when he washed up on a Turkish beach.
"What I came to realise is that it's the reductionism which has caused much of the problem," said Yusuf. "That we've forgotten how to understand the human story behind this and so it's that young soul that I visualised in my head when I wrote this this song."
He said that, when the shocking pictures of Kurdi appeared in the press and on TV in 2015, "suddenly people woke up a bit for a while and said, 'Oh God, that looks like my little nephew or my little son', and so that came to my mind."
But he also lamented any initial public galvanisation over the humanitarian crisis in the West, saying it had long since dissipated.
"It's kind of, 'Well that's news today and tomorrow it's old - and people move on and politics gets involved. It is quite sad that this happens and it is the politics which I think interferes with it."
Proceeds from the new record will go toward the #YouAreNotAlone campaign and Save The Children.
Singer-songwriter Yusuf, formerly known as Cat Stevens, has said the harrowing death of Syrian toddler Aylan Kurdi inspired his latest song.