Yes, it can!  Here are some resources:

Physical Activity, Movement, and Exercise for People with Dementia - From the Alzheimer's Society

Yoga for Alzheimer's Patients: Mindfulness and Movement - from the Institute on Aging

The Benefits of Chair Yoga for Persons with Dementia - from the Alzheimer's Project.

Yoga and Brain Health: How Yoga May Help Curb Risk Factors for Dementia - from YogaUOnline