Horsfield, 32 had been attracted by a number of clubs including Sunderland and former club West Bromwich Albion.
Leeds United Manager Kevin Blackwell said: "We are going to take him on loan until Christmas to see how Geoff performs. If things go well we have got the option to complete something with Sheff United.
"He is raring to go and it will be nice to see him in a white shirt. All being well he should be making his debut on Saturday."