"It's a good opportunity for me," Murphy told his club website. "Dunfermline have a lot of good players and I know Stephen Kenny from my time in Ireland. I need to play games as it's not good to be in the stand."
Murphy joined Motherwell from Cork City in January 2007 but has only made two appearances since McGhee took over in the summer.
"I want to go there, get back match sharpness and prove myself good enough to get back into the Motherwell first-team," he added.