Hutton joined Villa from Tottenham on transfer deadline day in August 2011.
The Scotland international, 27, started 29 matches and made a further two substitute appearances during his first season at Villa Park but has lost his place in the team to Matt Lowton this campaign.
Hutton will go straight into the Forest squad to play Wolves at Molineux on Saturday.
Chairman Omar Al Hasawi said in a statement: "Like most of the signings we have made, Alan brings great experience to our squad.
"He has played at the very highest level and will be a big asset to us over the next six weeks."