The 34-year-old defender was on loan at Championship side Ipswich Town and had initially agreed to extend his spell at Portman Road, but has instead chosen to sign a six-month deal to move to south Yorkshire.
Higginbotham's contract has the option of being extended to the end of next season and the player made his Blades debut in Tuesday's 2-2 draw with Doncaster.
Sheffield United have signed Stoke defender Danny Higginbotham on a free transfer.
Sheffield United manager Danny Wilson moved for Higginbotham after learning that Scottish centre-back Neill Collins will miss the next two months of action due to a triple fracture in his cheekbone.
The defender made 134 appearances for the Potters across two spells, scoring 14 goals.