Put a resistor (~10k would be good) between the 12V from the transformer and one of the Arduino's inputs. Then connect a diode between the same input and the Arduino's regulated 5V power supply (i.e. the "5V" pin), with the anode on the input (i.e. "point" the diode toward the 5V supply). Any regular silicon diode will work, since there is very little current through the 10k resistor.Whenever the voltage goes above 5V (plus the ~1/2V drop across the diode), the diode "turns on" and "clamps" the voltage at 5V (plus the diode drop). The "remaining" ~7V gets dropped across the resistor.
I don't have any schematic-drawing software. I'm gonna' have to get 'round to that...)
Can I "sense" if the transformer is on and so stop the servo? I reckon the software is trivial if I can somehow figure out the electronics. Can anyone point me in the right direction?