We study both theoretically and experimentally the electro-optical properties of vertically aligned deformed helix ferroelectric liquid crystals (VADHFLC) with subwavelength pitch that are governed by the electrically induced optical biaxiality of the smectic helical structure. The key theoretical result is that the principal refractive indices of homogenized VADHFLC cells exhibit the quadratic nonlinearity and such behavior might be interpreted as an orientational Kerr effect caused by the electric-field-induced orientational distortions of the FLC helix. In our experiments, it has been observed that, for sufficiently weak electric fields, the magnitude of biaxiality is proportional to the square of electric field in good agreement with our theoretical results for the effective dielectric tensor of VADHFLCs. Under certain conditions, the 2π phase modulation of light, which is caused by one of the induced refractive indices, is observed without changes in ellipticity of incident light.