Siddha means a semi-divine being supposed to be of great purity and holiness, and to possess supernatural faculties called siddhis. Siddha means also an inspired sage, seer or prophet.
From Light on Yoga by B.K.S. Iyengar Effects
Siddhasana is considered to be one of the main postures for dharana (concentration) and dhyana (meditation). The word Siddha means an inspired sage, seer or prophet. The siddhis are special powers that might be available to such a person or one who has obtained a deep state of meditation.
From the purely physical point of view, the asana is good for curing stiffness in the knees and ankles. In it the blood circulates in the lumbar region and the abdomen, and this tones the lower region of the spine and the abdominal organs.
1. Sit on the floor, with the legs stretched straight in front.
2. Bend the left leg at the knee. Hold the left foot with the hands, place the heel near the perineum and rest the sole of the left foot against the right thigh.
3. Now bend the right leg at the knee and place the right foot over the left ankle, keeping the right heel against the pubic bone.
4. Place the sole of the right foot between the thigh and the calf of the left leg.
5. Do not rest the body on the heels.
6. Stretch the arms in front and rest the back of the hands on the knees so that the palms face upwards. Join the thumbs and the forefingers and keep the other fingers extended.
7. Hold this position as long as you can, keeping the back, neck and head erect and the vision indrawn as if gazing at the tip of the nose.
8. Release the feet and relax for some time. Then repeat the pose for the same length of time, now placing the right heel near the perineum first and then the left foot over the right ankle as described above.