It's a contraction of "we will" and is similar to You'll which is a contraction "you will".Contractions originated in Elizabethan England as a fashionable way of speaking as clipped vocabulary was a perceived singn of wealth and breeding.
Is "we'll " even a word and if so how did it come about?
It is a "language contraction" and means "we will" - good and correct English. Like "I would" became "I'd". You can see the same things happening with the English Language now.