C., I know I'm terribly late to this question and undoubtedly will be repeating some things you have already seen. But, bear in mind, if your son is asking you about Santa, he has already started to question the existance of this fantastic being who can travel all around the world in one night!
He has, no doubt, seen and heard the story of St. Nicholas many times and in many different variations. Talk to him about that story and explain to him St. Nicholas' love of children and how, because parents and families and friends also love the children in their lives, they want to carry on the work that Nicholas did while he was alive. (Thus the 'Spirit of Christmas' is always alive and well as long as people love one another!) Tell him how people see things that are not so wonderful in the world and they long to hold onto a little of the goodness that Nicholas spread so freely so we have set aside this opportunity to show others that goodness and how much we care about them when they are so busy and stressed out the rest of the year. Remind him of that saying, "Keep Christmas Alive All Year 'Round", and make sure he understands that Nicholas' goodness was, indeed, spread all year 'round.
He will likely ask you eventually why people of non-Christian faiths do not celebrate Christmas, then. You will want to talk to him about the birth of Jesus and how the church, not knowing exactly when the Christ was born, chose to celebrate that momentous time in the church calendar at a time of year when people were celebrating the winter change of seasons because it was already tied to the winter solstice, a time of sharing and closeness among people. Explain to him that, because it is, basically, a Christian holiday, other faiths have chosen to celebrate that spirit of loving and giving in other ways.
This will probably, at some point lead to a question of Kwanzaa. A whole 'new' kettle of fish that has shown up in the last forty years or so... not a religious holiday but a societal ethnic celebration. Talk to him about how many people whose ancestors trace back to slaves brought over from Africa (and some who do not but still feel a link, if only by ethnic commonalities) still feel a connection to their ancient African heritage and this is their way of reminding themselves and their children of their ancestry.
Be sure to let him know he does not have to wait until Christmas to do something nice for someone else but Christmas reminds us that we are connected to something greater and bigger than ourselves and giving to others is one way we can experience that. And that, essentially, is what Santa Claus is all about.
Do remind him that younger children may still believe in Santa Claus as the jolly fat man of The Night Before Christmas, so it might be nice of him not to ruin their fantasy too soon. And suggest that he might want to point out to his friends at school that, although Santa may not be 'real' the way they think of him, Santa is very much alive and well everytime someone says, "Merry Christmas" or puts money in a Salvation Army bucket, or donates clothes or toys to a Christmas charity drive like the Salvation Army Angel Tree, or any of the myriad of possibilities for giving and sharing during the Christmas season.
When my son was young, we made an event of selecting an angel from the Angel Tree at the Mall and would go shopping for all the goodies for our special angel. It not only taught him something about the spirit of giving, but it also helped him to understand there are other children in the world who are not as fortunate as him. This might be a good time to start such a tradition with your son. It is a wonderful way to make the transition from a little boy on the receiving end of Christmas and Santa's goodwill to joining the giving side and engendering a little philanthropic aspect to his Christmas. And he can start to feel the wonder of "It's more blessed to give ..."
It can be a crushing experience for a youngster to learn that Santa is not real. This means that, among other things, his parents have been lying to him. That is why it is so important for your son to understand that, while Santa is not a physical reality in the body of one, singular individual, his goodness is very real, you wanted him to experience that and it gave you and Daddy the chance to give him special gifts you would like to be able to give him year round but could not afford, and that is why you did not tell him sooner the realities of Santa Claus.
Good Luck and Merry Christmas.
BTW: My children are both grown and I have a grandson who is ready to start college (OUCH!) And they all still get gifts from Santa Claus!