Danns, 30, heads to the John Smith’s Stadium immediately and should be available to make his debut for the Terriers when they host Birmingham City in the npower Championship this Saturday.
The Liverpool-born midfielder, who joined the Foxes in July 2011, spent seven weeks on loan with Bristol City prior to his return to King Power Stadium last week, making nine appearances and scoring twice for the Robins.
He will be ineligible for selection when City travel to Huddersfield in the fourth round of the FA Cup with Budweiser later this month.