Daley, 29, has made 24 appearances for the Bantams this season, scoring four goals, and completes a move just hours after Rotherham winger Kevin Ellison went the other way on a similar deal.
Daley told the club's official website: "I heard about the interest a couple of days ago and now I've signed until the end of the season.
"I know Nicky Law well from when he played at Bradford a couple of seasons back and we keep in touch so that will help the settling in process.
"I've been in the league a while, so I'm not worried about settling in, I'm here and I just want to get on with it.
"I'm very direct, with a couple of tricks up my sleeve and I can score goals. I've had a couple of injuries recently but I'm fit now and raring to go. It's a great loan move for me."
Source: PA
Source: PA