The 21-year-old youth product is no stranger to npower League Two having played four times for Burton earlier this season, scoring in their draw with Port Vale.
Chapell made his league debut for the Blades in late December having previously featured for the club in Johnstone's Paint Trophy ties.
"Jordan is quick, direct and the important part is that he knows the league," Torquay boss Alan Knill told the club's official website.
"I live in Sheffield and when the United youth-team had a good cup run, I watched a lot of their games and Jordan was one of the outstanding players.
"It gives us another forward option and when you bring in new players, it freshens training and makes it more competitive."
He will be involved on Saturday when the Gulls, two points above the relegation zone with nine games remaining, play Southend.