"Barry is a player I know well and having been a team-mate of his I can see the same hunger and determination within him as he had when I played alongside him," Dons boss Derek McInnes told Aberdeen's official website.
"It's clear to see he has retained a high level of performance.
"Both Tony (Docherty) and I have watched him recently and have only had good reports about his performances for Sheffield United.
"We still feel he has that winning mentality and is someone who can bring some real quality to the team. We're delighted to have him on board and as a local boy I'm sure he is looking forward to playing for his home town team."